Decision tool · West Capital Lending, Inc.
Refinance vs. HELOC Calculator
Compare the true cost of a cash-out refinance against a home equity line of credit — side by side, over the years you'll actually keep the loan.
A cash-out refinance replaces your whole mortgage; a HELOC borrows against your equity while your existing first mortgage stays untouched. Which one wins depends on your current rate, how much you need, and how long you'll keep it — so this calculator models total cost, not just the monthly payment. Adam DeCraene (NMLS# 2811542), Mortgage Loan Originator with West Capital Lending, Inc., offers both and shops 175 wholesale lenders for each.
Your numbers
The pre-filled figures are examples only — replace them with your own. They are not current rates, quotes, or offers.
Enter your numbers to see the comparison.
Option A — Refinance everything
One new loan replaces your current mortgage and includes the cash you need.
$0 New monthly principal & interest- New loan amount
- $0
- Closing costs
- $0
- Balance still owed after 7 yrs
- $0
- Total cost over 7 years
- $0
Option B — Keep mortgage + HELOC
Your current mortgage stays as-is; a HELOC covers just the cash you need.
$0 Combined monthly payment to start- Current mortgage payment
- $0
- HELOC payment (to start)
- $0
- Blended rate (mortgage + HELOC)
- 0%
- HELOC closing costs / fees
- $0
- Balance still owed after 7 yrs
- $0
- Total cost over 7 years
- $0
Refinance break-even
If the HELOC rate rises 2%
How "total cost" is calculated: every payment you would make during your time horizon, plus that option's closing costs, plus the loan balance still owed at the end of the horizon. That keeps the comparison honest — a refinance that restarts a 30-year clock isn't flattered by a lower payment alone.
Estimates only. This calculator is an educational estimate — not a rate quote, an offer of credit, a commitment to lend, or financial advice. The rates and costs shown are numbers you enter; actual rates, terms, and fees depend on credit profile, property, and lender approval, and may change. HELOC rates are typically variable and can rise or fall after closing, though HELOC #1 may offer a choice of a fixed or variable rate in some cases. For exact numbers on your situation, talk to Adam DeCraene, Mortgage Loan Originator, NMLS# 2811542 — call or text 949-393-6360.
The mechanics
The Core Difference
Both options put cash in your hand from the same source — your home's equity. What differs is what happens to the mortgage you already have:
Cash-Out Refinance — a brand-new first mortgage
A refinance pays off your old mortgage entirely and replaces it with one new loan for your remaining balance plus the cash you take out.
- Your rate and term reset on the entire balance — including the part you had already been paying down at your old rate
- Closing costs are charged on the whole loan, not just the cash portion
- One loan, one payment
- First-mortgage refinance rates are usually fixed for the life of the loan
HELOC — a second lien behind your mortgage
A HELOC sits behind your existing mortgage as a separate loan. Your first mortgage — its rate, payment, and remaining term — is completely untouched.
- You draw only what you need, when you need it, and pay interest on what you've drawn
- Closing costs are typically lower than a full refinance
- Two payments: your existing mortgage plus the HELOC
- HELOC rates are usually variable — which is why the calculator above stress-tests the HELOC at +2%
Typical patterns
When Each One Tends to Win
Every borrower's numbers differ — that's what the calculator is for — but these are the situations where each option typically comes out ahead:
A refinance tends to win when…
- The new rate is meaningfully below your current rate, so the whole balance gets cheaper, not just the new money
- You want one fixed payment and the certainty that the rate cannot rise later
- You're borrowing a large amount for a long horizon, so spreading the closing costs over many years makes them a smaller factor
A HELOC tends to win when…
- Your current first-mortgage rate is low and worth protecting — refinancing would reprice your entire balance at a higher rate
- You need a smaller or flexible amount and don't want to pay interest on money you haven't used yet
- The need is short-term or staged — renovation draws over several months, for example
- You want to repay and redraw: a line you can pay down and use again during the draw period
Home equity lines of credit
Adam's Two HELOC Options
Adam offers two separate HELOC products because the right way to borrow against your home depends on both your credit profile and your payment strategy. The guidelines below are Adam's product guidelines as of publication — they vary by lender and borrower profile, and minimums are not a guarantee of approval.
The Principal + Interest HELOC
Built for borrowers with strong credit and solid equity who want the most cost-effective way to borrow against their home.
- Pays both principal and interest from the start — your balance goes down with every payment
- Fixed-or-variable rate choice — in some cases, you can choose between a fixed or a variable rate
- Best-fit option for well-qualified borrowers
- Can be used for primary, secondary, and investment properties
- Draw on your equity for renovations, consolidation, or major purchases
- Minimum credit score (FICO) — minimum FICO depends on the product and occupancy type:
- Core HELOC: 640 owner-occupied · 680 non-owner-occupied
- Near Prime HELOC: 600 owner-occupied (second lien only)
- DSCR: 660
Credit score guidelines can change without notice and are minimums, not a guarantee of approval. All applications are subject to full underwriting review and approval.
Apply for HELOC #1The Interest-Only HELOC
Starts as interest-only — a fit for flexible-credit borrowers, and for borrowers who strategically want an interest-only payment.
- Designed for less-than-perfect credit profiles — a path to your equity when traditional lenders say no
- Also a strategic choice: borrowers of any credit strength pick it to keep the initial payment lower, manage cash flow, or put their equity to work in an investment strategy
- Starts as interest-only — lower payments at the beginning
Important disclosure: This HELOC starts as interest-only. During the interest-only period, your payments do not reduce the loan balance, and payments will increase when the principal-repayment period begins. Review the full terms before applying.
Apply for HELOC #2Reading the comparison
How to Read Your Result
Compare total cost over your horizon — not the monthly payment
The monthly payment is the easiest number to see and the easiest to be misled by. A refinance can show a lower payment simply because it stretches your balance over a fresh 30 years. The calculator's total cost figure — every payment over your horizon, plus closing costs, plus the balance still owed — is the number that actually decides which option is cheaper for you.
Watch the balance still owed at the horizon
Two options can cost similar amounts over seven years and leave you owing very different balances at the end of them. The balance still owed rows show where each path leaves you — especially important with an interest-only HELOC start, where the balance does not shrink at all during the interest-only period.
Check the +2% sensitivity before choosing a variable-rate line
HELOC rates are typically variable. The "If the HELOC rate rises 2%" panel shows what Option B costs if the line's rate climbs — if the HELOC still wins under that stress test, it wins with a margin of safety. If the result flips, the fixed-rate refinance's certainty may be worth more than the headline savings.
Common questions
Refinance vs. HELOC FAQs
Is a HELOC or a cash-out refinance cheaper?
It depends on your current rate, how much you need, and how long you will keep the loan — there is no universal winner. A cash-out refinance charges closing costs on the entire new loan and resets your rate on the whole balance, which is expensive if your current rate is low. A HELOC typically has lower closing costs and charges interest only on what you draw, but its rate is usually variable. The honest comparison is total cost over the years you will actually keep the loan — payments made, closing costs, and the balance still owed at the end — which is exactly what the calculator on this page computes. All figures are estimates based on the numbers you enter.
Does a HELOC change my existing mortgage or its rate?
No. A HELOC is a separate loan secured by a second lien behind your existing first mortgage. Your current mortgage — its rate, payment, and remaining term — stays exactly as it is. You simply have two payments instead of one: your existing mortgage payment plus the HELOC payment. That is why a HELOC is often the way to borrow when your first-mortgage rate is well below today's refinance rates.
Are HELOC rates fixed or variable?
HELOC rates are typically variable — they move with an index, so your rate and payment can rise or fall over time. Some lenders offer fixed-rate options or let you convert part of a balance to a fixed rate, but variable is the norm. First-mortgage refinance rates, by contrast, are usually fixed for the life of the loan. Because a variable rate can climb, the calculator on this page stress-tests the HELOC at 2% above the rate you enter before you decide.
How much equity do I need for a HELOC?
Combined loan-to-value (CLTV) limits — your first mortgage plus the HELOC, measured against your home's value — vary by lender and product, so there is no single number. Credit guidelines matter too. For Adam's HELOC Option 1, the minimum FICO guidelines are: Core HELOC 640 for owner-occupied homes and 680 for non-owner-occupied; Near Prime HELOC 600 for owner-occupied homes (second lien only); DSCR 660. These are Adam's product guidelines as of publication and vary by lender and borrower profile — talk to Adam about your specific equity position.
Can I get a HELOC on an investment property?
Yes. Adam's HELOC Option 1 can be used for primary homes, secondary homes, and investment properties. The minimum FICO guidelines for Option 1 are: Core HELOC 640 owner-occupied and 680 non-owner-occupied; Near Prime HELOC 600 owner-occupied (second lien only); DSCR 660. Guidelines are as of publication and vary by lender and borrower profile — investment properties often carry tighter limits, so confirm the details for your property with Adam.
Work With Adam
Adam DeCraene — Mortgage Loan Originator, NMLS# 2811542, CA DRE #02448241 — with West Capital Lending, Inc. Run your numbers above, then talk through whether a refinance or one of the two HELOC options fits your situation best — with access to 175 wholesale lenders behind the comparison.