Home Equity Loan vs. Cash-Out Refinance Calculator

Home Equity Access: Loan vs. Cash-Out Refinance Analyzer (USA Focus)

Your Current Situation & Needs

Current Estimated Home Value ($):

Current Outstanding Primary Mortgage Balance ($):

Current Interest Rate on Primary Mortgage (% p.a.):

Remaining Term on Primary Mortgage (Years):

Cash Amount Desired ($):

How long do you plan to stay in the home (Years)? (Helps evaluate break-even)

Home Equity Loan (HEL) Scenario

This assumes a fixed-rate home equity loan (second mortgage).

Estimated Interest Rate for Home Equity Loan (% p.a.):

Loan Term for Home Equity Loan (Years):

Upfront Closing Costs for Home Equity Loan ($):

Cash-Out Refinance Scenario

This replaces your current mortgage with a new, larger one.

New Total Loan Amount ($):

This is typically your current mortgage balance plus the cash you want to take out. Closing costs are handled separately below but can sometimes be rolled into the loan by lenders (adjust this amount manually if so).

New (Refinanced) Mortgage Interest Rate (% p.a.):

New (Refinanced) Mortgage Loan Term (Years):

Upfront Closing Costs for Cash-Out Refinance ($):

Comparison Summary: Home Equity Loan vs. Cash-Out Refinance

Important Considerations:

Interest Rates: The rates you enter are estimates. Actual rates depend on your creditworthiness, market conditions, and lender.
Closing Costs: These can vary significantly. Obtain official Loan Estimates for accurate figures.
Loan Term Impact: A cash-out refinance often resets your mortgage term (e.g., to a new 30 years). This might lower your payment but could mean paying more interest over a longer period if your original loan was well into its term. A home equity loan is a separate, typically shorter-term loan.
Total Interest Paid: Consider the total interest paid over the life of the new debt for each scenario. This tool estimates interest on the new HEL or the *entire* new refinanced mortgage.
Loan-to-Value (LTV): Lenders have maximum LTV limits (often 80-85% for cash-out, sometimes higher for HELs on their own). This calculator shows the resulting LTV for your awareness.
Tax Deductibility: Mortgage interest may be tax-deductible in the US, but rules and limits apply (e.g., for acquisition debt vs. home equity debt used for other purposes). This calculator does not factor in tax savings. Consult a tax advisor.

This tool provides estimates for comparison based on your inputs and is NOT financial advice. Always consult with lenders and a qualified financial advisor.