US HELOC (Home Equity Line of Credit) vs. Cash-Out Refinance Calculator

Compare a HELOC draw versus a cash-out refinance for a specified cash need. Outputs include estimated monthly payments, total interest paid over chosen term, total cost (payments + fees), and side-by-side scenario summaries. Models are parameterized for interest rates, terms, fees, and existing mortgage balance.

Page updated:: Jul 14, 2026
Tool version:: v1.1.0

Overview

Use this calculator to compare taking a HELOC draw versus doing a cash-out refinance for a specific cash need. The tool models payments, interest and total cost over a chosen analysis horizon and highlights combined loan-to-value (LTV) considerations.

Important: results are estimates based on user inputs. Rates and fees vary. Consult mortgage professionals and tax advisors for personalized advice.

Core inputs

Home value

Current estimated market value of your home. · Min 50000 · Max 5000000

Current mortgage balance

Outstanding balance on your existing mortgage. · Min 0 · Max 5000000

Desired cash out (amount you want)

Amount of cash you want to access via HELOC draw or cash-out refinance. · Min 0 · Max 1000000

HELOC interest rate (annual %)

Use current advertised variable or introductory fixed rates as appropriate. · Min 0 · Max 25

HELOC repayment term (years, after draw period)

Number of years for amortization after any draw period. · Min 1 · Max 30

HELOC draw period (years)

Length of the draw/interest-only period (if applicable). · Min 0 · Max 15

Refinance interest rate (annual %)

Estimated fixed rate for the cash-out refinance loan. · Min 0 · Max 25

Refinance term (years)

Term length in years for the new refinanced mortgage. · Min 5 · Max 30

HELOC fees (one-time, $)

Origination, appraisal or setup fees for HELOC. · Min 0 · Max 20000

Refinance fees (one-time, $)

Closing costs, appraisal, title fees paid at refinance. · Min 0 · Max 20000

Maximum allowed combined LTV (%)

Combined loan-to-value ratio cap typically enforced by lenders. · Min 50 · Max 95

Analysis period (years)

Time horizon for total cost comparison (e.g., 5 years). · Min 1 · Max 30

Results

Max cash available (at max LTV)

$90,000.00

HELOC payment (cash-out portion, monthly)

$387.65

Cash-out refi payment (full new mortgage, monthly)

$1,199.10

HELOC cost over analysis period (+fees)

$23,758.97

Refi cost over analysis period (+fees)

$75,446.06

Note

HELOC payment covers only the new cash on top of your existing mortgage; the refinance payment replaces your entire mortgage. Compare total monthly outlay (existing mortgage + HELOC) against the refi payment. Estimates exclude taxes and rate changes.

How to read the result

What it means: The displayed value is an estimate based on your inputs. It represents the calculated scenario under current assumptions, not a guaranteed amount.
Next step: Use the result as a starting point. Adjust parameters to compare scenarios and validate with a professional when needed.
Calculation limits: The model uses simplified formulas and cannot account for all variables in your specific case (local regulations, personal conditions, temporal changes).

Methodology

HELOC model: Assumes the full desired cash out is drawn immediately. During the draw period the model assumes interest-only payments equal to the outstanding principal times the HELOC annual rate. After the draw period the model amortizes the outstanding balance over the specified HELOC repayment term at the HELOC rate.

Cash-out refinance model: The new loan principal equals the existing mortgage balance plus the desired cash out plus refinance fees. The new loan is amortized over the refinance term at the provided refinance interest rate.

Calculations use standard amortization formulas. Totals over the analysis period include monthly payments and one-time fees. This model does not simulate prepayments, changing variable rates, escrow changes, or tax effects in detail.

Glossary+

Combined Loan-to-Value (CLTV): Total outstanding mortgages divided by the home's market value, expressed as a percentage.
Draw period: A period during which borrowers may draw funds from a HELOC and often make interest-only payments.
Amortization: Repayment of principal and interest over time according to a schedule.

Key takeaways

This tool provides a side-by-side estimate to help you evaluate HELOC vs cash-out refinance decisions over a chosen time horizon. Review the results with a lender to obtain firm rates and fees.

Consider your intended holding period, rate risk (HELOC variability), closing costs, and tax implications when choosing an option.

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Worked examples

Example A — $50,000 cash need, moderate rates (5-year horizon)

Over five years the HELOC option typically has lower initial payments (interest-only during draw) but may produce higher total interest if rates rise or amortization is extended. The refinance increases monthly payment stability and consolidates interest into a single amortizing loan; upfront refinance fees are higher and should be weighed against five-year savings.

Interpretation

Example B — $30,000 cash need, low refinance rate

A low refinance rate can make cash-out refinance more attractive despite higher upfront fees, especially if the borrower intends to keep the loan for several years. Use the calculator to quantify total interest and monthly payment differences for your horizon.

Interpretation

Frequently asked questions

How accurate are the numbers?

The calculator uses standard amortization formulas and the inputs you provide. Accuracy depends on correct inputs for rates, fees and terms. It does not replace lender quotes or professional advice.

Does the model account for variable HELOC rates or future rate changes?

No. This tool uses the single HELOC annual rate you enter. For variable-rate HELOCs, consider running sensitivity scenarios with multiple rate assumptions.

Are tax implications included?

No. Tax deductibility of interest depends on your situation and current tax law. Consult a tax professional.

What should I do if my combined LTV exceeds lender limits?

If combined LTV exceeds typical lender limits (for example 80–85%), lenders may deny the cash-out or permit a smaller cash amount. The eligibility warning will flag this; contact lenders to confirm your options.

Sources & references

Consumer Financial Protection Bureau — Shop for a mortgage: https://www.consumerfinance.gov/owning-a-home/mortgages/
Federal Reserve — Consumer credit: https://www.federalreserve.gov/releases/g19/current/
IRS — Topic on mortgage interest: https://www.irs.gov/taxtopics/tc505

Quality & oversight

Author: Ugo Candido, MBA
Maintained by: Ugo Candido, MBA
Page updated: Jul 14, 2026
Tool version: v1.1.0

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