Cash-Out Refinance vs. Home-Equity Loan Calculator

BORROW THE SAME CASH TWO WAYS

Replace your first mortgage—or keep it?

Compare one larger cash-out refinance with keeping your current first mortgage and adding a fixed home-equity loan.

Example rates and costs are made up for learning. They are not live offers.

Cash borrowing assumptions

YOUR STARTING POINT

Current mortgage and cash needed

Use a fixed-rate first mortgage. Both choices provide the same cash amount and are compared over the same time.

What you still owe on your first mortgage ($)

Find “principal balance” on your latest statement.

Current fixed interest rate (%)

For 6%, enter 6. Use the note rate, not APR.

Payments left on the current mortgage (months)

20 years left × 12 = 240 months.

Cash you want to receive ($)

Use the same cash amount for both choices.

How many years should we compare?

Try 5 if you may sell or refinance in five years.

Optional estimated home value ($)

0 skips the loan-to-value illustration.

CHOICE 1

Replace it with one larger refinance

The new mortgage repays the current balance, provides the cash and includes entered financed costs.

Cash-out refinance fixed rate (%)

Use a hypothetical rate or a lender estimate.

Cash-out refinance term (months)

30 years = 360 months.

Refinance costs paid in cash ($)

Fees you pay from your pocket at closing.

Refinance costs added to the loan ($)

These increase the new mortgage balance.

CHOICE 2

Keep the first mortgage and add a second loan

Your existing rate and payoff date remain. The new fixed second loan provides the cash.

Fixed home-equity loan rate (%)

Use the second loan’s note rate, not APR.

Home-equity loan term (months)

15 years = 180 months.

Home-equity loan costs paid in cash ($)

Fees paid separately for the second loan.

Home-equity loan costs added to it ($)

These increase only the second mortgage.

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YOUR ESTIMATED COMPARISON

The lowest payment may not have the lowest cost.

Compare the starting payment, borrowing costs and mortgage debt still owed after the same number of years.

Cash received is new mortgage debt. It will never be labeled as savings.

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