Product comparison
Home equity options: cash-out refinance, loan, or HELOC?
The main home-equity borrowing choices differ in a fundamental way: a cash-out refinance replaces the first mortgage, while a home equity loan or line of credit is generally an additional loan secured by the home.
Reviewed by Equity Flow Group lending operations · Updated August 24, 2026
Quick comparison
| Option | Loan structure | Access to funds | Key comparison |
|---|---|---|---|
| Cash-out refinance | Replaces first mortgage | Lump sum at closing | New terms apply to the full mortgage balance |
| Home equity loan | Separate secured loan | Lump sum | Usually a distinct payment and fixed repayment schedule |
| HELOC | Separate revolving line | Draw as needed during the draw period | Often variable-rate, with payment changes over time |
Questions to ask before choosing
- Do you need one lump sum or flexibility to draw over time?
- Would replacing your current first-mortgage terms help or hurt?
- Can the payment change, and what would a higher payment mean for your budget?
- What are the upfront costs, annual fees, draw requirements, and early-closure terms?
- How much total interest could you pay over the expected time you keep the loan?
Estimate, then verify
Use the cash-out calculator for a preliminary range and the DTI calculator to organize monthly obligations. A licensed lender must verify property value, eligibility, and final terms.
Read official comparisons
The Consumer Financial Protection Bureau publishes independent mortgage and home-equity materials. Use those resources alongside product disclosures and comparable Loan Estimates.