Home Equity Loan vs Cash-Out Refinance Calculator

Updated Oct 2026

Use the Home Equity Loan vs Cash-Out Refinance Calculator to compare full scheduled payment and interest-plus-fee scenarios without treating home equity as income or ignoring the rate on the existing first mortgage.

Market and currency

This planning comparison uses US mortgage terminology.

Current home value

User-entered planning value; a lender appraisal may differ.

Existing first-mortgage balance

Current principal balance.

Existing first-mortgage note rate

Contract rate used for the remaining schedule.

Existing mortgage months remaining

Scheduled months remaining.

Cash needed

Net additional borrowing before entered fees.

Home-equity loan rate

Fixed annual rate for the second-loan scenario.

Home-equity loan term

Scheduled second-loan months.

Home-equity loan fees

Verified cash fees.

Cash-out refinance rate

Annual note rate for the replacement mortgage.

Cash-out refinance term

Scheduled replacement-loan months.

Cash-out refinance fees

Verified cash closing costs; this model does not finance them.

Guest calculations stay on this device. Signed-in results sync privately.

Your result

Home Equity Loan vs Cash-Out Refinance Calculator Result

Enter your values, then calculate to see a verified result.

Inputs usedReview the information used for this result.

Full calculation and sourcesReview the equation, normalized inputs, assumptions, and version.

Versioned calculationFormula v1.0.0

What is calculated

Method

The entered values are normalized, validated, and passed to the versioned calculation.

Important boundary

The tool excludes tax deductibility, approval, credit pricing, points, financed fees, escrow, mortgage insurance, variable rates, recasts, home-equity lines, daily interest and the opportunity cost of cash fees.

Enter the inputsAdd the values and choose the options required for this calculation.Required fields

Run the calculationValidate the inputs and apply the versioned method.Formula v1.0.0

Review the resultRead the answer together with its context and important boundary.Result + assumptions

Interpretation

The result reflects the current inputs and selected workflow.

Calculated with the versioned 1.0.0 model.

Review the result assumptions and important boundary before acting on the plan.

Use this result

Home Equity Loan vs Cash-Out Refinance Calculator Method and FormulaUnderstand the formula, variables, assumptions and limits behind the Home Equity Loan vs Cash-Out Refinance Calculator.Home Equity Loan vs Cash-Out RefinanceUse the Home Equity Loan vs Cash-Out Refinance Calculator result with a document checklist, comparison framework, limitations and primary sources.

Home Equity Loan vs Cash-Out Refinance Calculator: purpose and method

Compare keeping an existing mortgage plus a home-equity loan with replacing it through a cash-out refinance.

Keep exploring

Method and test recordFormula v1.0.0

Recorded scope: Not recorded
Publisher: CalculatorGeek
Recorded review date: Not recorded
Next source review: Not scheduled
Definition fixtures: 1 configured scenarios
Published examples: 1 shown below

Recorded method

Primary-source review, independent oracle fixture, zero-rate boundary where applicable, formula dependency validation, metadata and link checks.

These records describe the published model and reference tests. A test-case count is not a certification of every possible input or an independent specialist review. Editorial policy

Known limitations

The tool excludes tax deductibility, approval, credit pricing, points, financed fees, escrow, mortgage insurance, variable rates, recasts, home-equity lines, daily interest and the opportunity cost of cash fees.

Method sources

Latest model update

2026-10-10 - Completed missing semantic entities, relationships, answer targets, query themes, questions, and visible input/output meaning without changing the calculation model.

Reference inputs and expected results

Up to 12 examples from the configured definition fixtures are shown. Expected values use the stated output units; invalid inputs are intended to be rejected.

Case	Inputs	Expected result
Independent reference case	Market and currency: us; Current home value: 500000 currency; Existing first-mortgage balance: 120000 currency; Existing first-mortgage note rate: 0 pct; Existing mortgage months remaining: 120 count; Cash needed: 60000 currency; Home-equity loan rate: 0 pct; Home-equity loan term: 120 count; Home-equity loan fees: 1000 currency; Cash-out refinance rate: 0 pct; Cash-out refinance term: 120 count; Cash-out refinance fees: 2500 currency	current_payment: 1000; equity_payment: 500; Existing mortgage plus home-equity monthly payment: 1500; Cash-out refinance monthly payment: 1500; Keep-first-mortgage route: scheduled interest plus fees: 1000; Cash-out route: scheduled interest plus fees: 2500; Difference in scheduled interest plus entered fees: 1500; Combined loan-to-value: 36 %; Cash-out refinance loan-to-value: 36 % (allowed numeric tolerance: 1.0E-6)

Report an issue with this tool. Include the page URL, units, expected answer, and steps to reproduce. Do not include sensitive personal information.

On this page

Direct answer

The meaningful comparison is not the new loan rate alone. A home-equity loan preserves the first-mortgage rate but adds a second payment; a cash-out refinance replaces the entire first mortgage at new terms.

Enter figures from current statements, declarations, illustrations or written offers. The result is an auditable scenario, not a quote, approval, recommendation or prediction.

For the next related calculation, use the Australia Borrowing Power Scenario Calculator. Use this related calculation when its inputs match the next part of your problem.

How the calculation works

Each loan uses standard fixed-rate monthly amortization. The keep-first-mortgage route combines remaining first-mortgage interest, home-equity-loan interest and entered fees; the cash-out route combines replacement-loan interest and entered closing costs.

The tool keeps rate, term, fees, limits, valuation and policy assumptions visible so a user can change one input at a time and explain why the result moved.

To compare this result with another relevant method, open the Australia LVR Calculator. Use this related calculation when its inputs match the next part of your problem.

Worked reference example

At zero interest with equal ten-year terms, 120,000 plus 60,000 produces the same 1,500 monthly debt service under either structure. Fees of 1,000 versus 2,500 create a 1,500 cost difference.

The public fixture reproduces this boundary with deterministic arithmetic. Displayed money rounds to two decimals while the formula engine carries additional precision.

Inputs and documents to collect

Use the latest controlling document for each input. Record its date and whether the amount includes tax, fees, financing, deductibles, other recoveries or a non-guaranteed assumption.

Current home value: User-entered planning value; a lender appraisal may differ.
Existing first-mortgage balance: Current principal balance.
Existing first-mortgage note rate: Contract rate used for the remaining schedule.
Existing mortgage months remaining: Scheduled months remaining.
Cash needed: Net additional borrowing before entered fees.
Home-equity loan rate: Fixed annual rate for the second-loan scenario.
Home-equity loan term: Scheduled second-loan months.
Home-equity loan fees: Verified cash fees.
Cash-out refinance rate: Annual note rate for the replacement mortgage.
Cash-out refinance term: Scheduled replacement-loan months.
Cash-out refinance fees: Verified cash closing costs; this model does not finance them.

How to interpret the result

Compare written Loan Estimates, APR disclosures, cash-to-close, lien position, tax advice, prepayment terms and whether extending the old balance over a longer term increases total interest.

Compare a base case with at least one adverse case. A smaller payment, lower rate or larger displayed value is not automatically the safer or lower-cost choice when scope, term, security, exclusions or guarantees differ.

Decision checklist

Verify every input against a dated document.
Keep the comparison horizon and scope consistent.
Separate cash paid now from amounts financed or retained.
Check a higher-cost or lower-benefit scenario.
Save the inputs and result date.
Ask the lender, insurer, adviser or regulator about policy-specific exceptions.

Audit the result before using it

Recalculate the reference case before relying on a personal scenario. Then compare each displayed output with a manual reasonableness check: a zero-rate loan should reduce to principal divided by periods, a percentage should reconcile to its numerator and denominator, a limit should never pay more than the entered eligible loss, and a guaranteed column must never absorb a non-guaranteed value. If the official document differs, keep the document as the controlling answer and investigate timing, compounding, rounding, fees, valuation, tax or policy wording.

Record the calculator URL, date, inputs, selected units and source document. That audit trail makes the estimate reproducible and gives a lender, insurer or adviser a precise discrepancy to review.

Limits and when to stop

Stop and obtain qualified help when legal eligibility, tax treatment, underwriting, a live market rate, policy wording, official valuation or professional judgment controls the answer.

Common mistakes

Comparing different horizons or benefit scopes.
Treating an estimate as a binding quote or approval.
Leaving fees, deductibles, loan balances or non-guaranteed values out.
Using a market value where a lender or insurer valuation controls.
Assuming a lower payment always means a lower total cost.
Failing to retain the source document and calculation date.

Inputs, outputs and result meaning

Compare keeping an existing mortgage plus a home-equity loan with replacing it through a cash-out refinance.

Inputs

Market and currency: This planning comparison uses US mortgage terminology. Available choices are United States (USD).
Current home value: User-entered planning value; a lender appraisal may differ. Supported units are selected market currency.
Existing first-mortgage balance: Current principal balance. Supported units are selected market currency.
Existing first-mortgage note rate: Contract rate used for the remaining schedule. Supported units are percent (%).
Existing mortgage months remaining: Scheduled months remaining. Supported units are months.
Cash needed: Net additional borrowing before entered fees. Supported units are selected market currency.
Home-equity loan rate: Fixed annual rate for the second-loan scenario. Supported units are percent (%).
Home-equity loan term: Scheduled second-loan months. Supported units are months.
Home-equity loan fees: Verified cash fees. Supported units are selected market currency.
Cash-out refinance rate: Annual note rate for the replacement mortgage. Supported units are percent (%).
Cash-out refinance term: Scheduled replacement-loan months. Supported units are months.
Cash-out refinance fees: Verified cash closing costs; this model does not finance them. Supported units are selected market currency.

Outputs

Difference in scheduled interest plus entered fees: This is the primary result. The display rule uses up to 2 decimal places.
Existing mortgage plus home-equity monthly payment: The display rule uses up to 2 decimal places.
Cash-out refinance monthly payment: The display rule uses up to 2 decimal places.
Keep-first-mortgage route: scheduled interest plus fees: The display rule uses up to 2 decimal places.
Cash-out route: scheduled interest plus fees: The display rule uses up to 2 decimal places.
Combined loan-to-value: It is displayed in %. The display rule uses up to 2 decimal places.
Cash-out refinance loan-to-value: It is displayed in %. The display rule uses up to 2 decimal places.

Frequently asked questions

Why can refinancing be costly even at a lower payment?

Replacing the old balance at a higher rate or stretching it over more years can increase total interest.

Does the tool compare a HELOC?

No. It models a closed-end fixed-rate home-equity loan; revolving HELOC terms need a separate model.

Primary sources and review status

Primary-source, formula, fixture, boundary, content, link and responsive-browser QA was completed on 2026-10-19 by CalculatorGeek Algorithmic Team at the site owner's request. No lender, insurer, regulator or cited organization reviewed or endorsed this CalculatorGeek material. Current written contracts, policy forms, regulations, valuations and professional advice control.