HELOC vs Cash-Out Refinance Breakeven Calculator

Stack your current mortgage payment and HELOC interest-only charges against a full cash-out refinance before you sign. Enter the remaining balance, the cash you want to extract, and rate offers to surface blended monthly costs, how many months it takes to earn back closing fees, and the lifetime interest change created by resetting the term.

Principal remaining on your first mortgage before pulling additional equity.
Lump-sum equity you want to access, modeled either as a HELOC draw or cash-out proceeds.
Current or forecasted variable APR on the HELOC balance you plan to keep open.
Quoted fixed APR for the replacement mortgage that would consolidate balance and cash-out proceeds.
Defaults to $0. Add lender, appraisal, and title charges that must be offset by lower payments.
Defaults to the refinance APR when blank. Enter your current note rate for a tighter payment comparison.
Defaults to 25 years. Use the precise years remaining on your existing amortization schedule.
Defaults to 30 years. Adjust if you plan to shorten or extend the new mortgage term.

Results exclude taxes, insurance, escrow requirements, and potential prepayment penalties. Verify final terms with your lender before refinancing.

Examples

  • $325,000 balance, $55,000 cash-out, HELOC 8.50%, refinance 6.15%, $5,250 closing, 23 years remaining, new 30-year term ⇒ Stay with HELOC: $2,544.26 per month ($2,309.98 mortgage + $234.27 HELOC interest) • Cash-out refi: $2,207.47 per month on a 30.0-year term • Monthly advantage: $336.79 in lower payments by refinancing • Closing costs $5,250.00 recover in 16 months (1.3 years) • Lifetime interest avoided by refinancing: $18,942.63.
  • $340,000 balance, $45,000 cash-out, HELOC 9.10%, refinance 6.80%, no closing costs, 20 years remaining, new 20-year term ⇒ At 9.10% HELOC interest and 6.80% refinance pricing, the new payment of $2,938.86 is not lower than staying with $2,936.60. No breakeven occurs.
  • $280,000 balance, $40,000 cash-out, HELOC 8.25%, refinance 6.05%, $3,600 closing, 20 years remaining, new 25-year term ⇒ Stay with HELOC: $2,077.19 per month ($1,970.90 mortgage + $106.29 HELOC interest) • Cash-out refi: $1,960.24 per month on a 25.0-year term • Monthly advantage: $116.95 in lower payments by refinancing • Closing costs $3,600.00 recover in 31 months (2.6 years) • Lifetime interest avoided by refinancing: $8,904.12.

FAQ

Can I include cash-out closing costs that are rolled into the new loan?

Yes. Add financed costs to the cash needed input and leave the optional closing-cost field for cash you pay at closing. The calculator still reports payment savings, breakeven timing, and lifetime interest change.

How do I account for adjustable-rate HELOCs that may change later?

Enter the average rate you expect during the draw period. Rerun the scenario with higher or lower HELOC APRs to stress-test future rate adjustments and see how savings shrink or expand.

What if I plan to sell before the breakeven month?

Compare the breakeven timeline with how long you expect to keep the property. If you will sell sooner, monthly savings may not recoup closing costs even when payments are lower, so staying with the HELOC could make more sense.

Can I model paying down the HELOC principal aggressively?

Yes. Reduce the cash-out amount to reflect planned principal paydowns or rerun the scenario with a smaller draw to approximate how future lump-sum payments shrink interest-only costs.

How do lender credits or points factor into breakeven timing?

Add points you pay upfront to the closing cost field and subtract any credits the lender offers. The breakeven output then shows how many months of lower payments it takes to cover the net cost of locking the rate.

Additional Information

  • HELOC costs assume interest-only payments on the draw for the entire remaining mortgage term while principal on the draw remains outstanding.
  • Existing mortgage amortization is based on your current note rate and years remaining unless you override either figure in the optional fields.
  • Cash-out refinance payments are fully amortizing at the new APR and term, so lifetime interest reflects any reset to a longer schedule.
  • Breakeven months fall to zero when closing costs are left blank because lower payments start producing savings immediately.
  • Lifetime interest comparison combines your existing mortgage amortization with ongoing HELOC interest versus starting a single refinanced loan.

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