HELOC vs Home Equity Loan vs Cash-Out Refinance
February 4, 2026
You can tap home equity three main ways: a HELOC (line of credit), a home equity loan (lump sum, fixed rate), or a cash-out refinance (new first mortgage plus cash). The grid below compares them at a glance; then compare rates for the option that fits.
| Product | What it is | Rate | First mortgage | Best for | Compare rates |
|---|---|---|---|---|---|
| HELOC | Revolving line; draw as needed, pay interest on balance. | Usually variable | Unchanged | Flexibility; unsure of amount or timing. | HELOC rates → |
| Home equity loan | Lump sum upfront; fixed rate, fixed payments. | Usually fixed | Unchanged | Known amount; one fixed payment. | Home equity loan rates → |
| Cash-out refinance | New first mortgage larger than balance; you get the difference in cash. | Fixed or ARM (new loan) | Replaced | Large lump sum; rates low; okay to reset term. | Cash-out refi rates → |
HELOC and home equity loan are second liens—your first mortgage stays in place. A cash-out refinance pays off the first mortgage and gives you one new loan plus cash. Closing costs are typically highest on a cash-out refi (full refinance); HELOCs often have lower or no closing costs. For more detail, read our HELOC guide, home equity loan guide, and cash-out refinance guide.