Cash-Out Refinance & HELOC Calculator
Equity Access · Payment Comparison · Total Cost
Use this free cash-out refinance calculator and HELOC calculator to find out how much home equity you can borrow, compare monthly payments, and understand total borrowing costs before you talk to a lender.
Cash-Out Refinance vs. HELOC — Which Home Equity Option Is Right for You?
A cash-out refinance replaces your entire existing mortgage with a new, larger loan — you get the difference as cash at closing. Use this cash-out refinance calculator to see your new payment, new LTV, and total interest cost. A HELOC (Home Equity Line of Credit) sits on top of your existing mortgage as a second loan, giving you a revolving credit line without touching your current rate or term — use the HELOC calculator below to estimate your draw-period and repayment-period payments.
Both options let you access your home equity. The right choice depends on how much you need, whether you want a fixed lump sum or flexible draws, and how long you plan to stay in the home.
Step 1 — Your Home Equity
Current Equity
$180,000
Current LTV
55.0%
Max Cash-Out
$100,000
at 80% LTV
Most lenders cap at 80% LTV for cash-out, but some allow 85–90%. Adjust the LTV field to match what your lender offers.
Step 2 — Choose Your Option
Based on 80% LTV — your lender may allow more or less
Not sure which option fits your situation?
A licensed loan officer can review your equity, income, and goals to recommend the right path.
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How to Use This Cash-Out Refinance & HELOC Calculator
Step 1 — Check Your Available Equity
Enter your home's current market value and your remaining mortgage balance. The calculator immediately shows your current equity, current LTV ratio, and the maximum cash you can access. The default LTV is 80%, which is the most common lender limit — adjust it if your lender has told you a different number.
Step 2 — Choose Cash-Out Refi or HELOC
A cash-out refinance replaces your existing mortgage entirely. You get a new loan at a new rate, for a new term, and receive the cash difference at closing. A HELOC adds a second loan on top of your existing mortgage — your current rate and term are untouched, and you get a revolving credit line to draw from as needed.
Cash-Out Refi — What the Numbers Mean
Enter how much cash you need, your current and new interest rates, and the closing costs. The calculator shows your new loan amount, new LTV, and how your monthly payment changes. If your payment increases, that's the cost of accessing your equity through a refi — not a bad thing if you need the funds, just important to know.
HELOC — Draw Period vs. Repayment Period
During the draw period (typically 10 years), you only pay interest on what you've borrowed — making payments relatively low. Once the draw period ends, the loan enters repayment and you pay principal plus interest, which causes the payment to jump significantly. Plan for this payment increase before committing to a HELOC.
Cash-Out Refi vs. HELOC — Key Differences
| Cash-Out Refi | HELOC | |
|---|---|---|
| Affects existing mortgage? | Yes — replaces it | No — adds on top |
| Interest rate type | Usually fixed | Usually variable |
| How you receive funds | Lump sum at closing | Revolving credit line |
| Closing costs | 2–5% of loan amount | Low or none |
| Best for | Large one-time needs | Ongoing or uncertain needs |
When a Cash-Out Refinance Makes Sense
A cash-out refinance calculator helps you see the real cost of tapping your equity — but knowing when it makes sense is just as important as knowing the numbers. A cash-out refi works best when you can get a rate close to your current mortgage rate, when you need a large lump sum (home renovation, paying off high-interest debt, medical expenses), and when you plan to stay in the home long enough to recoup the closing costs.
It's also worth considering if your current rate is higher than today's rates — in that case, a cash-out refinance could lower your rate and give you cash at the same time.
When a HELOC Is the Better Choice
A HELOC payment calculator is most useful when you're not sure exactly how much you'll need or when you'll need it. A HELOC gives you a credit line to draw from over time — ideal for ongoing expenses like a multi-phase renovation, tuition payments spread over years, or an emergency fund backstop.
Since a HELOC doesn't replace your mortgage, it also preserves your existing rate. If you locked in a low rate years ago, a HELOC lets you access equity without giving that rate up. The tradeoff: HELOC rates are usually variable and often higher than a cash-out refi rate, and the payment jump when repayment begins can be significant.
Risks of Borrowing Against Home Equity
Both a cash-out refinance and a HELOC use your home as collateral. If you can't make payments, you risk foreclosure — unlike credit card debt, which is unsecured. Before using either option, make sure the purpose of the funds justifies putting your home on the line.
Other risks to consider: rising HELOC rates (they're variable and can increase significantly over a 10-year draw period), extending your mortgage term through a cash-out refi (resetting to 30 years means more total interest even if your rate is the same), and overspending against your equity if the credit line is easily accessible.
Frequently Asked Questions
What is a cash-out refinance?
A cash-out refinance replaces your existing mortgage with a larger loan at a new interest rate and term. The difference between the new loan amount and your current balance is paid to you as cash at closing. It's one of the most common ways homeowners access their equity for large expenses.
What is a HELOC?
A HELOC (Home Equity Line of Credit) is a revolving line of credit secured by your home equity. Unlike a cash-out refinance, it does not replace your mortgage — it sits on top of it as a second loan. You draw from the line as needed during the draw period (typically 10 years), paying interest only, then repay principal and interest over the repayment period.
How much equity can I borrow with a cash-out refinance?
Most lenders allow you to borrow up to 80% of your home's value minus your current mortgage balance. For example, if your home is worth $400,000 and you owe $220,000, you could potentially access up to $100,000 (80% × $400,000 − $220,000). Some lenders allow up to 85–90% — this home equity calculator uses 80% as the default but lets you adjust it.
Is a HELOC cheaper than a cash-out refinance?
It depends. HELOCs typically have lower or no closing costs, which makes them cheaper upfront. But HELOC rates are variable and usually higher than fixed mortgage rates. Over a long repayment period, the total interest on a HELOC can exceed a cash-out refi. Use this HELOC calculator to compare total costs for your specific scenario.
Does a cash-out refinance affect my existing mortgage?
Yes — a cash-out refinance completely replaces your existing mortgage with a new loan. Your current loan is paid off, and you start fresh with a new rate, new term, and new monthly payment. A HELOC, by contrast, does not touch your existing mortgage.
Formula & Methodology
Both calculations use the standard mortgage amortization formula for monthly payments. HELOC draw-period payments are interest-only: the outstanding balance multiplied by the monthly rate. Repayment-period payments use the full amortization formula on the original draw amount.
Where P = principal, r = monthly interest rate (annual ÷ 12), n = total months. CLTV (Combined LTV) for HELOC = (existing mortgage balance + HELOC draw) ÷ home value.
References
- Fabozzi, F. J. (2005). The Handbook of Fixed Income Securities. McGraw-Hill.
- Consumer Financial Protection Bureau. "Home equity loans and HELOCs." consumerfinance.gov
- Freddie Mac. "Cash-Out Refinance Guidelines." freddiemac.com
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Results are estimates for informational purposes only. Actual loan terms, LTV limits, rates, and closing costs vary by lender. Consult a licensed loan officer before making any financial decisions.