The quick answer
- Choose a HELOC if you want flexibility to borrow over time, like a credit line, and only pay on what you use.
- Choose a home equity loan if you need one set amount now and want a fixed, predictable payment.
- Consider a cash-out refinance if replacing your first mortgage with a new one makes sense for your situation.
Side by side
| HELOC | Home Equity Loan | Cash-Out Refinance | |
|---|---|---|---|
| How it works | A line of credit you draw from | A one-time lump sum | A new first mortgage for more than you owe |
| Rate | Usually adjustable | Usually fixed | Fixed or adjustable |
| Payment | Changes with your balance | Same every month | One new payment |
| First mortgage | Stays in place | Stays in place | Replaced |
| Great for | Projects in stages, ongoing needs | One-time expenses | Bigger changes to your overall loan |
Questions to ask yourself
- Do I need all the money now, or over time? Over time points to a HELOC. All at once points to a home equity loan.
- How do I feel about a payment that can change? If you prefer certainty, a fixed home equity loan may give you more peace of mind.
- Do I like my current mortgage? If yes, a HELOC or home equity loan lets you keep it. If not, a cash-out refinance might be worth a look.
- How long will I stay in the home? This can affect which option costs less over time.
We'll help you compare
You don't have to figure this out alone. Share your goals, your current mortgage statement, and roughly how much you'd like to borrow. We'll show you how each option looks for your situation so you can decide with confidence.
Learn more: HELOC · Home Equity Loan · Cash-Out Refinance
Frequently asked questions
Is a HELOC always cheaper than a cash-out refinance?
Not always. It depends on your current mortgage, how much you need, and how long you'll keep the loan. We'll compare them for you.
Can I have both a HELOC and a home equity loan?
In some cases, yes, but most homeowners choose one. We'll recommend what makes sense for your goals.
Which is easier to qualify for?
The requirements are similar. Both look at your credit, income, and the equity in your home.