How to use this calculator
- Enter what your home would appraise for, what you owe on your first mortgage, its rate and the years left. If you own the home outright, enter 0 for the mortgage.
- Enter the cash you want and the years until you expect to repay it, from a sale, a refinance or your own payments. Try the shortest, likeliest and longest.
- Tick the options you have quotes for and enter their rates: the HELOC’s rate today (its index plus margin), a home equity loan’s fixed rate, and a cash-out refinance’s rate.
- Under More options, set the line’s draw and repayment periods, its fees, its maximum rate and any intro rate, each option’s term, closing costs and limit on your home’s value, and whether the costs are added to what you borrow.
The numbers already filled in are an example. Replace them with your own.
How it's calculated
Each option is run month by month. Each payment pays that month’s interest first, a twelfth of the yearly rate times the balance, and the rest reduces the balance. During the line’s draw period the payment is the interest alone, unless you choose principal and interest; when repayment starts, the balance is spread over the repayment period. A home equity loan and a cash-out refinance have one level payment for their term.
The yearly cost of each option is the rate at which the cash you receive equals what you pay for it: the payments, the fees, and what you would still owe at the end of your years, all as a rate on the cash. For a HELOC or a home equity loan, your mortgage is the same either way and cancels out. A cash-out refinance replaces your mortgage, so its payments are compared with your mortgage’s, and its cost includes the new rate on what you already owe.
An example
Your home is worth $410,700 and you owe $282,000 at 2.96% with 25 years left, a payment of $1,331.42. You want $65,000 for 10 years, with closing costs added to what you borrow.
- A HELOC at 7.125% with $500 of costs: $65,500 drawn, $388.91 a month interest only, $46,669 of interest over 10 years. Its yearly cost is 7.23%.
- A 20 years home equity loan at 9%: $589.32 a month, $51,740 of interest over 10 years, and $46,522 still owed. Its yearly cost is 9.13%.
- A 30-year cash-out refinance at 7.625%: a new mortgage of $350,700 at $2,482.23 a month in place of $1,331.42. Over 10 years it charges $252,390 of interest against $71,104 on your mortgage, so its yearly cost on the $65,000 is 23.12%. It is also over the 80% limit: the most it lets you take out is $42,881.
Averaged over everything you would owe on the home, the rates today are 3.75% with the HELOC and 4.10% with the home equity loan, against 7.625% on all of it with the cash-out refinance. That average is a common shortcut; the yearly cost also counts the fees and how fast each option is repaid.
The line’s payment and its rate
The line’s payment rises from $388.91 to $512.75 when repayment starts in year 11, at the same rate. A line’s rate can change only with an index outside the lender’s control, and every line must state a maximum: at 18%, the payment would be $982.50 in the draw and $1,010.87 in repayment. Rather than guess where the rate goes, the calculator finds the rate at which the line stops being the cheaper choice: here, even at 9.01% for the whole 10 years, it would cost no more than the home equity loan. You can also set a change in the rate for when repayment starts.
Limits, and when a line can be frozen
Each option’s limit is on everything you would owe on the home as a share of its value, checked to two decimals and then rounded up to a whole percent, as Freddie Mac checks its own loans. At 85% the line could be $67,116. Regulation Z’s commentary says a fall in value that halves the gap between the line and your equity is enough for the lender to stop new draws or lower the line: $30,792 here, to $379,908, which would stop the $1,616 you haven’t drawn. A smaller fall can count too, depending on the facts, and a lender has other grounds, such as a material change in your finances.
Assumptions and limits
- You borrow the whole amount at once, in the month the line opens or the loan closes. If you would draw a line bit by bit, enter the amount you expect to have drawn.
- The line’s rate stays where you set it, after any intro rate, for the whole time you carry the balance, with the one change you enter for repayment, and never above its maximum. During the draw the payment is interest only or principal and interest over the line’s whole term; a minimum set as a percentage of the balance, or an interest-only period shorter than the draw, is not modeled.
- Payments are monthly and every month has the same number of days, with interest rounded to the cent. Every new loan’s first payment falls in the month your mortgage’s next payment would.
- At the end of your years you repay whatever you still owe. No prepayment penalty is assumed on either loan; the line’s early-closure fee applies only if you enter one.
- Your mortgage is your only loan against the home: a second mortgage or line you already have is not counted. Its payment is worked out from what you owe, its rate and the time left, unless you enter the payment you make.
- Lenders set their own limits on how much of your home’s value you can borrow against. The defaults are 85% for the line and the home equity loan, a limit 93% of 2025’s lines were within, and Freddie Mac’s 80% for a cash-out refinance of a one-unit home you live in. To be sold to Fannie Mae or Freddie Mac, a cash-out refinance generally needs the mortgage it pays off to be at least 12 months old. Above $832,750 a new mortgage is a jumbo loan with its own rules.
- Everything is before tax: see the question on deducting the interest. Escrow, property taxes, homeowners insurance and mortgage insurance are left out, as are FHA and VA cash-out rules, reverse mortgages and state rules.
- The default rates take each product’s 2025 median rate in federal Home Mortgage Disclosure Act data, its difference that year from the prime rate (for the line) or Freddie Mac’s 30-year survey rate (for the loans), and that difference added to today’s prime rate of 7% and survey rate of 7.4%. The default closing costs are 2025 medians for a home equity loan and for a 30-year cash-out refinance. The amount is about the 2025 median home equity loan, and the mortgage is a 2021 loan at that year’s average rate on 80% of that year’s median new-home price.
Input field details
What to enter in each box, where to find the number, and how this calculator treats it. When two calculators give different answers from the same numbers, it's usually because they handle one of these differently.
Your home’s value
What your home would appraise for today.
Where to find itA recent appraisal, or your best estimate from recent sales of similar homes nearby.
How this tool treats itEvery limit is a share of this value: the lender adds what you owe on the home and divides by it. The freeze figure is a fall from this value.
Allowed range$10,000 to $20,000,000
What you owe on your mortgage
The principal balance of your first mortgage today. Enter 0 if you own the home outright.
Where to find itYour latest mortgage statement ("principal balance" or "unpaid principal").
How this tool treats itA HELOC and a home equity loan sit behind this mortgage and leave it as it is. A cash-out refinance pays it off with one new, larger mortgage.
Allowed range$0 to $20,000,000
Not includedA second mortgage or a line of credit you already have is not counted.
Your mortgage’s interest rate
The note rate on your mortgage, to up to three decimals (2.875).
Where to find itYour mortgage statement or promissory note. Use the interest rate, not the APR, which adds fees.
How this tool treats itIt matters to the cash-out refinance only, which replaces this rate on everything you already owe.
Allowed range0% to 20%
Years left on your mortgage
The whole years of payments left on your mortgage.
Where to find itYour statement (payments remaining) or your note’s maturity date.
How this tool treats itWith the months beside it, this sets how many payments are left, and so the payment the cash-out is compared with.
Allowed range0 to 40 years
Months left, beyond the years
Any months of payments left beyond the whole years.
Where to find itYour statement’s count of payments remaining.
How this tool treats itWith a balance above $0, no time left at all is read as one payment left.
Allowed range0 to 11 months
Your mortgage payment, principal and interest
The principal and interest you pay each month, without escrow. Leave it at 0 to have it worked out.
Where to find itYour mortgage statement’s breakdown of the monthly payment.
How this tool treats itAt 0 the payment is worked out from what you owe, the rate and the time left. A payment more than $1 below that figure would not repay the loan in time, so the worked-out payment is used instead.
Allowed range$0 to $200,000 a month
Amount you want to borrow
The cash you need, before any closing costs.
How this tool treats itEvery option hands you this amount. With closing costs added to what you borrow, the loan is this amount plus the costs; paid in cash, the costs come out of your pocket at closing.
Allowed range$1,000 to $2,000,000
Years until you’d pay it off or sell
How many years you expect to carry the debt before repaying it or selling the home.
How this tool treats itEach option is judged over these years: the yearly cost of the money is the rate at which the cash you receive equals everything you pay, fees included, with whatever you still owe repaid at the end. It is not the APR a lender discloses, which leaves out costs other than interest.
Allowed range1 to 30 years
Compare: HELOC, home equity loan, cash-out refinance
Tick each option you have a quote for, or want to compare.
How this tool treats itAt least one stays ticked. The options ticked are ranked by their yearly cost over your years.
HELOC rate
The line’s interest rate after any intro rate: its index plus its margin.
Where to find itThe lender’s quote or your agreement. Most lines use the prime rate as the index.
How this tool treats itA home equity line of credit is a revolving line secured by your home. Its rate varies with its index; here it stays at the rate you enter for as long as you carry the balance, and the break-even rate tells you how high it could go before the line stops being the cheaper choice.
Allowed range0% to 20%
Home equity loan rate
The fixed rate from the lender’s quote.
Where to find itThe Loan Estimate or the lender’s quote.
How this tool treats itA home equity loan is a second mortgage for a lump sum, repaid in equal monthly payments at a fixed rate over its term.
Allowed range0% to 20%
Cash-out refinance rate
The rate on the new mortgage.
Where to find itThe Loan Estimate or the lender’s quote.
How this tool treats itA cash-out refinance replaces your mortgage with a larger one and hands you the difference. It is compared with keeping your mortgage, so its cost counts the new rate on everything you already owe, not only on the cash.
Allowed range0% to 20%
Closing costs
Whether you add the closing costs to what you borrow or pay them in cash at closing.
How this tool treats itOne choice for all three options, so they compare on the same footing.
HELOC draw period
The years during which you can borrow from the line.
Where to find itYour HELOC agreement or the lender’s disclosure.
How this tool treats itThe whole amount is drawn when the line opens. During the draw period the payment follows your choice below.
Allowed range1 to 20 years
HELOC repayment period
The years after the draw period over which the balance is repaid. Enter 0 if the balance is due at the end of the draw.
Where to find itYour HELOC agreement or the lender’s disclosure.
How this tool treats itWhen repayment starts, the payment is reset to repay the balance in equal payments over these years, so it usually rises. With 0 and interest-only payments, the whole balance is due as one balloon payment.
Allowed range0 to 30 years
Payments during the draw
Interest only, the usual minimum, or principal and interest.
How this tool treats itInterest only pays each month’s interest and nothing off the balance. Principal and interest repays the line in equal payments over the draw and repayment periods together.
Not includedA minimum set as a percentage of the balance, which varies by lender.
HELOC closing costs
What it costs to open the line: appraisal, title and lender fees.
Where to find itThe lender’s disclosure. Some lenders waive some or all of them.
Allowed range$0 to $50,000
HELOC annual fee
Any yearly fee the lender charges to keep the line open.
Where to find itYour HELOC agreement.
How this tool treats itCharged at the end of each year of the draw period, whatever the balance.
Allowed range$0 to $1,000 a year
HELOC limit on your home’s value
The most the lender lets your mortgage and the line together be, as a share of your home’s value.
Where to find itThe lender. It is often called the combined loan-to-value limit.
How this tool treats itThe line plus your mortgage, divided by the home’s value, is figured to two decimals and then rounded up to the next whole percent, and must not exceed this limit.
Allowed range50% to 100%
Your credit line
The line’s credit limit, if you know it. Leave it at 0 for the most your limit allows.
Where to find itYour HELOC agreement or the lender’s approval.
How this tool treats itThe line sets how far your home’s value could fall before the lender may freeze it: under Regulation Z’s commentary, a fall that halves the gap between your credit line and your equity is enough to let the lender stop new draws or lower the line. A line below the amount you draw is read as the amount drawn.
Allowed range$0 to $20,000,000
HELOC maximum rate
The highest rate your line can reach.
Where to find itYour HELOC agreement, which must state it.
How this tool treats itThe rate is never above this. You also see the repayment payment if the rate were at this maximum when repayment starts.
Allowed range0% to 30%
Rate change when repayment starts
How many points higher or lower you want to try the rate from the start of repayment.
How this tool treats itAdded to the HELOC rate for the repayment years only, and held between 0% and the maximum rate.
Allowed range−10 to +10 points
HELOC early-closure fee
Any fee for closing the line within its first years.
Where to find itYour HELOC agreement.
How this tool treats itCharged when your years end within the fee’s window and before the line’s term ends.
Allowed range$0 to $5,000
Charged if closed within
How many years after opening the early-closure fee applies.
Where to find itYour HELOC agreement.
How this tool treats itAt 0 the fee is never charged.
Allowed range0 to 10 years
My HELOC has an intro rate
Tick it if the line starts at a lower rate for its first months.
Intro rate
The rate for the intro months.
Where to find itThe lender’s offer.
How this tool treats itUsed as entered. After it ends, the HELOC rate applies.
Allowed range0% to 20%
Intro months
How many months the intro rate lasts.
Where to find itThe lender’s offer.
How this tool treats itAn intro period longer than the draw period is read as the draw period.
Allowed range1 to 60 months
Home equity loan term
The number of years the loan is repaid over.
Where to find itThe lender’s quote.
Home equity loan closing costs
The lender and title costs on the loan.
Where to find itThe Loan Estimate, section D (total loan costs).
Allowed range$0 to $50,000
Home equity loan limit on your home’s value
The most the lender lets your mortgage and the loan together be, as a share of your home’s value.
Where to find itThe lender.
How this tool treats itChecked the same way as the HELOC’s limit.
Allowed range50% to 100%
Cash-out refinance term
The number of years the new mortgage is repaid over.
Where to find itThe lender’s quote.
How this tool treats itA term shorter than the time left on your mortgage raises the payment but can leave you owing less by the end of your years.
Cash-out refinance closing costs
The lender and title costs on the new mortgage. If you pay points, add them here and enter the rate they buy.
Where to find itThe Loan Estimate, sections D and E.
Allowed range$0 to $100,000
Cash-out refinance limit on your home’s value
The most the new mortgage can be, as a share of your home’s value.
Where to find itThe lender. 80% is the usual limit for a one-unit home you live in; it is lower for second homes, rentals and two- to four-unit homes.
How this tool treats itThe new mortgage divided by the home’s value is figured to two decimals and then rounded up to the next whole percent.
Allowed range50% to 100%
Questions
Why does a cash-out refinance cost so much when its rate is close to the HELOC’s?
What happens to my HELOC payment when the draw period ends?
How much can I borrow against my home?
Can the bank freeze my HELOC?
Is HELOC interest tax-deductible?
Should I choose a HELOC or a home equity loan if rates might rise?
What does “yearly cost” mean here?
Does a HELOC have closing costs?
Version history
- October 21, 2026 (version 1.0.0): First version. Compares a HELOC, a home equity loan and a cash-out refinance by their yearly cost over the years you'll carry the debt, with the HELOC's payment jump, borrowing limits and when a line can be frozen.