Cash-Out Refinance vs HELOC
**Cash-out refinance** replaces your mortgage with a larger loan—one payment, new rate on full balance. A **HELOC** is a revolving line—draw as needed, often variable rate on drawn amount only.
Step by step
1. Total interest
Refi resets amortization on entire balance; HELOC interest only on draws.
2. Closing costs
Refi closing costs rival a purchase—HELOC fees often lower.
3. Rate type
Fixed refi vs variable HELOC—stress +2% on HELOC.
Cash-out vs HELOC
Large one-time need may favor refi; ongoing projects may favor HELOC.
- Cash-out refi: Single fixed payment; resets loan term.
- HELOC: Flexible draws; variable rate risk.
Use our calculators
Common mistakes
- Using equity for depreciating spend without payoff plan
FAQ
Which is faster?
HELOC approval often quicker; refi timeline similar to purchase refi.