A HELOC is revolving and variable-rate. A home equity loan is a fixed-rate lump sum. A cash-out refinance replaces your first mortgage with a bigger one. Keep a low first-mortgage rate? HELOC or home equity loan. Want one loan at today’s rate? Cash-out.
How they differ
The deciding factor is often your current first-mortgage rate. If it’s low, a HELOC or home equity loan (a second lien) preserves it. If you’d refinance anyway, a cash-out consolidates into one payment.
Choosing
Pick a HELOC for flexible, as-needed access; a home equity loan for a fixed lump sum with predictable payments; a cash-out refinance for a single new mortgage, especially if today’s rate beats your current one.
| Factor | HELOC / Home Equity Loan / Cash-Out |
|---|---|
| Structure | Revolving / Lump sum / New 1st mortgage |
| Rate | Variable / Fixed / Fixed or ARM |
| Keeps 1st mortgage | Yes / Yes / No |
| Best for | Flexible access / Fixed project / One consolidated loan |
Frequently asked questions
Which is cheapest?
A HELOC often has the lowest up-front cost; a cash-out may offer the lowest rate if you’d refinance anyway. It depends on your situation.
Which keeps my low mortgage rate?
A HELOC or home equity loan — both are second liens that leave your first mortgage in place.
Can I have both a HELOC and a first mortgage?
Yes — that’s the typical setup. The HELOC is a second lien behind your first mortgage.
Save Financial is a California-licensed mortgage brokerage (NMLS #377740, DRE #01875766). Figures are illustrative for 2026 and not an offer of credit.