HELOC or cash-out refinance?

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Less interest over 5 yearsOption 1

$31,711 less: $60,105 with a second mortgage against $91,816 with a cash-out refinance.

Option 1: keep your loan and add a second mortgage$1,622a month; blended rate 4.57%

Option 2: cash-out refinance$1,816a month at 6.75% on $280,000

When your current rate is well below today's, adding a second mortgage on the new money usually costs less than refinancing the whole balance. The blended rate shows it in one number.

The second mortgage is calculated as a 20-year loan for comparison. Many HELOCs start interest-only with a variable rate, so payments can change. Closing costs are not included. Rates are your inputs, not offers.

Keep your first mortgage and add a second loan for the cash, or replace both with one new loan.

How this tool works

When your current rate is well below today's, adding a second loan on the new money usually costs less than refinancing the whole balance. The blended rate shows it in one number. HELOCs often start interest-only with a variable rate, so payments can change; the second loan here is figured as a 20-year loan for comparison. The cash-out refinance is figured as a new 30-year loan; that is the longest it can run, not how long you have to take, and paying extra principal pays it off sooner. Rates are your inputs, not offers.

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Cash-out, or a second mortgage?

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