Home Equity Education
Cash-Out Refinance vs. HELOC vs. Closed-End Second Mortgage Comparison
Quick Answer (BLUF): Homeowners holding a low-rate existing first mortgage compare the blended weighted-average cost of adding a second-lien HELOC or Home Equity Loan against resetting the entire balance via a single first-lien cash-out refinance.
Visual Cost & Payment Breakdown · Home Equity vs. Cash-Out Guide
The short version
If your first mortgage has a lower rate than you could get today, a second lien such as a HELOC or home equity loan lets you borrow without replacing it. A cash-out refinance replaces the whole first mortgage at a new rate. The fair comparison is the blended cost of everything you would owe, not just the rate on the new money.
Last reviewed against the primary sources listed below.
ToolBlended rate checkYour quotes, one comparable number.DecideKeep or replaceThe core question.Route 1HELOCA line you draw on.Route 2Home equity loanA fixed lump sum.Route 3Cash-out refinanceOne new first mortgage.SizeLarge balancesWhen the first lien is jumbo.BasicsLien orderWho gets paid first.New guideDraw and repaymentHow a home equity line moves from the draw period to the repayment per.New guideSubordination laterWhy a home equity line lender must agree to stay second when you refin.GlossaryKey termsPlain definitions with sources.GuideHELOC rate changesWhy most lines of credit have variable rates and what limits apply.GuideCosts by optionHow upfront costs differ between second liens and a cash-out refinance.PrintableLender questionsQuestions to bring to any lender, ready to print.
Your numbers only
We publish no rates. Use quotes from lenders and the CFPB's guide to equity options.