All three let you turn your home’s equity into cash. A HELOC is a line of credit you draw from as needed. A home equity loan is a lump sum, usually with a fixed payment, and you keep your current mortgage. A cash-out refinance replaces your mortgage with a new, larger one. The right choice depends on your current rate, how much you need and how you’ll use it.
The quick comparison
| HELOC | Home equity loan | Cash-out refinance | |
|---|---|---|---|
| How you get the money | Draw as you need it | One lump sum | One lump sum |
| Rate | Usually variable | Usually fixed | Fixed or adjustable |
| Your current mortgage | Stays the same | Stays the same | Replaced |
| Often a fit for | Ongoing or phased projects | One big expense | Big needs, or when a new rate also makes sense |
When a HELOC makes sense
A HELOC works well when you don’t need all the money at once, like a renovation done in stages. You pay interest only on what you use.
When a home equity loan makes sense
If you have a great rate on your current mortgage and want to keep it, a home equity loan lets you borrow a lump sum with a predictable fixed payment.
When a cash-out refinance makes sense
If you need a larger amount, or today’s options could also improve your current mortgage, a cash-out refinance rolls everything into one new loan with one payment. See our refinance options.
Which one is right for me?
You don’t have to figure that out alone. We’ll look at your current loan, your home’s value and your goals, then compare options from our lending partners. Learn more on our Home equity page.
Frequently asked questions
How much equity can I borrow?
It depends on your home’s value, what you owe and the program. Lenders usually let you borrow up to a percentage of your home’s value, minus your current balance. We’ll give you your real number.
Can I use home equity to pay off credit cards?
Yes, many homeowners do. Rolling high-interest balances into one payment can lower what you pay each month. Keep in mind your home secures the loan, and a longer term can mean more interest overall. We’ll help you decide if it makes sense for you.
Do I need an appraisal?
Often, though not always. Some lenders can use other ways to value your home. We’ll tell you what your loan requires.
We’ll make this the easy part.
- 130+ lending partners, so you get more options
- Competitive pricing and our Match or Beat Program
- Over 40 years of combined experience
- Direct access to your loan officer by chat, text or cell
Avalon Mortgage Group is based in Alpharetta, Georgia, serving Milton, Roswell, Johns Creek, Cumming, metro Atlanta and beyond.
Loan programs, pricing and eligibility are subject to underwriting and can change. Match or Beat applies to comparable written mortgage offers. Not a commitment to lend.