Understanding Cash-Out Refinancing vs Home Equity Line of Credit (HELOC) When it comes to accessing your home's equity, two popular options are cash-...
Formula
const maxLtv = 0.8;
const availableEquity = Math.max(0, current_home_value * maxLtv - current_mortgage_balance);
const cashOutAmount = Math.min(Math.max(desired_cashout, 0), availableEquity);
const newLoanAmount = current_mortgage_balance + cashOutAmount;
const helocAmount = cashOutAmount;
const cashOutMonthlyRate = cash_out_rate / 1200;
const helocMonthlyRate = heloc_rate / 1200;
const months = Math.max(loan_term * 12, 1);
const cashOutMonthly = cashOutMonthlyRate > 0 ? newLoanAmount * cashOutMonthlyRate / (1 - Math.pow(1 + cashOutMonthlyRate, -months)) : newLoanAmount / months;
const helocMonthly = helocAmount * helocMonthlyRate;
const refiTotalCost = cashOutMonthly * months + newLoanAmount * 0.03;
const helocTotalCost = helocMonthly * 120 + helocAmount * 0.02;
const totalCostComparison = { refi: refiTotalCost, heloc: helocTotalCost };
const recommendation = refiTotalCost <= helocTotalCost ? 'Cash-out refinance has the lower modeled total cost.' : 'HELOC has the lower modeled total cost.';
return { "available_equity": availableEquity, "cash_out_monthly": cashOutMonthly, "heloc_monthly": helocMonthly, "total_cost_comparison": totalCostComparison, "recommendation": recommendation };Current Home Value
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Current Mortgage Balance
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Cash-Out Refinance Interest Rate (%)
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HELOC Interest Rate (%)
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New Loan Term (Years)
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Desired Cash Out Amount
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Use the result to compare providers, request quotes, or send the scenario to a specialist when the numbers matter.
This Cash-Out Refinancing vs HELOC calculator compares the total cost of accessing home equity through two common methods: cash-out refinancing (replacing your mortgage) and a home equity line of credit (adding a second lien). Enter your home value, current mortgage balance, desired cash amount, and rate assumptions to see which option costs less over your planned timeframe.
Use this real-estate calculator to compare scenarios before committing money, time, or a provider conversation.
The estimate combines Current Home Value, Current Mortgage Balance, Cash-Out Refinance Interest Rate (%) and returns Available Home Equity, Cash-Out Refinance Monthly Payment, HELOC Monthly Interest Payment.
If the result changes your decision, verify the current quote, rate, eligibility rule, or provider term before acting.
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