A cash-out refinance and a HELOC (home equity line of credit) are the two leading ways to tap home equity, but they serve different purposes.
HELOC and home equity loan rates have recently averaged around 7.4% to 8.1%, well below typical credit card rates.
In recent years, HELOC and home equity loan rates have averaged around 7.4% to 8.1%, significantly below typical credit card rates. Cash-out refinance rates reflect current mortgage rates, with the added benefit of predictable payments and long-term structure.
If your priority is stability and debt consolidation, a cash-out refinance may be more effective. If you want ongoing access to funds, for example to handle unpredictable expenses, a HELOC might fit better.
Choose by what you need the money to do: one structured payoff, or a line you can draw on as needs come up.
HelloLend helps you compare both side by side, so you can see which aligns with your financial goals.
In reality, strategic refinance borrowers most often use funds for targeted goals, like debt reduction, home improvements, and financial planning. And with homeowner equity near historic highs, many borrowers have significant value left after refinancing.
Credit card debt doesn't only hurt your budget. It can weaken your long-term financial health. The average U.S. household holds several thousand dollars in credit card debt, often costing hundreds or thousands in interest each year.
Nearly 30% of homeowners are considering tapping home equity in the next year, showing interest remains high even in a shifting rate environment.
A loan officer can price a cash-out refinance and a HELOC on your home side by side, so you can see the payment on each. Pre-qualifying will not affect your credit score.
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