{
  "slug": "heloc-vs-cash-out-refi",
  "title": "HELOC vs Cash-Out Refinance Calculator",
  "heading": "HELOC vs Cash-Out Refinance Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/heloc-vs-cash-out-refi",
  "summary": "Compare all-in borrowing cost of tapping equity through a HELOC versus refinancing your whole mortgage.",
  "description": "A HELOC leaves your low first-mortgage rate untouched and only charges interest on what you draw, but usually carries a variable rate. A cash-out refinance replaces your entire mortgage at a new rate — potentially higher than your current one — but often at a lower fixed rate than a HELOC. This tool compares the blended cost of keeping your existing mortgage plus a HELOC against refinancing the whole balance, over the amount you need and the years you'll carry it.",
  "formula": "HELOC Cost = Existing Mortgage Interest + Draw Amount × HELOC Rate × Years. Refi Cost = New Total Balance Interest over Years at New Rate.",
  "dateModified": "2026-09-06",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=heloc-vs-cash-out-refi",
  "inputs": [
    {
      "id": "existingBalance",
      "label": "Existing mortgage balance",
      "kind": "number",
      "hint": null,
      "default": 250000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "existingRate",
      "label": "Existing mortgage rate",
      "kind": "number",
      "hint": null,
      "default": 3.5,
      "unit": "%",
      "min": 0,
      "max": 15
    },
    {
      "id": "drawAmount",
      "label": "Cash needed",
      "kind": "number",
      "hint": null,
      "default": 60000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "helocRate",
      "label": "HELOC rate",
      "kind": "number",
      "hint": null,
      "default": 9,
      "unit": "%",
      "min": 0,
      "max": 20
    },
    {
      "id": "refiRate",
      "label": "Cash-out refi rate",
      "kind": "number",
      "hint": null,
      "default": 6.75,
      "unit": "%",
      "min": 0,
      "max": 15
    },
    {
      "id": "years",
      "label": "Years you'll carry the debt",
      "kind": "number",
      "hint": null,
      "default": 7,
      "unit": null,
      "min": 1,
      "max": 30
    }
  ],
  "outputs": [
    {
      "id": "winner",
      "label": "Lower-cost option",
      "format": "raw",
      "hint": null,
      "primary": true
    },
    {
      "id": "helocCost",
      "label": "HELOC path total interest",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "refiCost",
      "label": "Cash-out refi total interest",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "diff",
      "label": "Interest saved",
      "format": "currency",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Existing mortgage balance: 250000 $",
      "Existing mortgage rate: 3.5 %",
      "Cash needed: 60000 $",
      "HELOC rate: 9 %",
      "Cash-out refi rate: 6.75 %",
      "Years you'll carry the debt: 7"
    ],
    "outputs": [
      "Lower-cost option: HELOC",
      "HELOC path total interest: $99,050",
      "Cash-out refi total interest: $146,475",
      "Interest saved: $47,425"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter existing mortgage balance ($).",
      "Enter existing mortgage rate (%).",
      "Enter cash needed ($).",
      "Enter heloc rate (%).",
      "Enter cash-out refi rate (%).",
      "Enter years you'll carry the debt.",
      "Read your lower-cost option on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "existingBalance": 150000,
        "existingRate": 2.1,
        "drawAmount": 36000,
        "helocRate": 5.3999999999999995,
        "refiRate": 4.05,
        "years": 4
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "existingBalance": 250000,
        "existingRate": 3.5,
        "drawAmount": 60000,
        "helocRate": 9,
        "refiRate": 6.75,
        "years": 7
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "existingBalance": 400000,
        "existingRate": 5.6000000000000005,
        "drawAmount": 96000,
        "helocRate": 14.4,
        "refiRate": 10.8,
        "years": 11
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "When does a HELOC usually win?",
      "a": "When your existing first mortgage rate is well below current market rates — refinancing the whole balance to a higher rate to access a fraction of it in cash is usually the expensive move."
    },
    {
      "q": "When does cash-out refi win?",
      "a": "When you need a large amount relative to your balance, want a fixed rate, or current mortgage rates are close to or below your existing rate."
    },
    {
      "q": "Does this include closing costs?",
      "a": "Add the refi's closing costs (2-5% of the new loan) into your own comparison; this model isolates the interest cost difference so you can layer fees on top."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/heloc",
    "https://www.revenuelab.fyi/toolbox/cash-out-refinance"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — HELOC vs Cash-Out Refinance Calculator (https://www.revenuelab.fyi/toolbox/heloc-vs-cash-out-refi)"
}