HELOC vs Home Equity Loan
Both borrow against the equity you have without touching the mortgage you already hold. What separates them is whether the payment can move after you sign.
Private by design. Your numbers stay on this device.
Educational estimates only. Not financial, tax, or lending advice.
Updated
Which one should you take?
Take the home equity loan when you know the amount and want the payment to stay fixed for the life of the debt. The money arrives once, the rate is fixed, and the payment on the day you sign is the payment in year eight.
Take the HELOC when you do not yet know how much you need, or need it in instalments. You are charged only on what you have drawn, which is cheaper for a project that turns out smaller than planned. In return you accept two risks: the rate is variable, and the payment steps up when the draw period ends.
Neither touches your first mortgage, so a below-market rate on it survives either way. That is what separates both of these from a cash-out refinance.
Over your 26-year stay
Read the payment step-up before the total. A HELOC that is cheaper over your stay can still be the wrong choice if the payment after the draw period is one you could not meet.
- Keep current
- Monthly payment
- $2,767
- Net cost over your stay
- $687,691
- vs keeping your mortgage
- —
- Break-even, ours
- —
- Break-even, conventional
- —
- HELOC + mortgage
- Monthly payment
- $3,100
- Net cost over your stay
- $775,620
- vs keeping your mortgage
- -$87,929
- Break-even, ours
- Never recovers
- Break-even, conventional
- No monthly saving
- Equity loan + mortgage
- Monthly payment
- $3,244
- Net cost over your stay
- $725,199
- vs keeping your mortgage
- -$37,508
- Break-even, ours
- Never recovers
- Break-even, conventional
- No monthly saving
Why two break-even figures? The conventional figure counts only the monthly payment saving against the cash you pay upfront. Ours also counts what you still owe when you sell, which is why the two disagree.
Compared over
the 26 years you expect to stay
Two break-even figures. The conventional figure counts only the monthly payment saving against the cash you pay upfront. Ours also counts what you still owe when you sell, which is why the two disagree.
| Leave it alone | Borrow beside it | ||
|---|---|---|---|
| Measure | Keep current | HELOC + mortgage | Equity loan + mortgage |
| Interest rateThe rate on the new or largest loan in this scenario. | 6.875% | 8% | 8% |
| Starting loan balance | $320,000Low | $370,000 | $370,000 |
| Starting LTV (loan-to-value) | 71.1% | 82.2% combined | 82.2% combined |
| Principal & interest | $2,204Low | $2,537 | $2,682 |
| Extra principalVoluntary principal on top of the scheduled payment. Part of what you pay each month, so it belongs in the all-in figure. | — | — | — |
| PMI | — | — | — |
| Property tax + insuranceIdentical across every scenario for the same home, but a real part of the monthly bill. | $563 | $563 | $563 |
| Monthly HOA dues | — | — | — |
| All-in monthly payment | $2,767Low | $3,100 | $3,245 |
| Total closing costs | NoneLow | $500 | $1,500 |
| Cash you have to put inClosing costs paid in cash, plus any lump sum or one-time payment this option needs upfront. | NoneLow | $500 | $1,500 |
| Monthly commitment on topMoney you have to keep finding every month beyond the required payment: voluntary extra principal, or the same money invested instead. The required payment itself is the all-in figure above. | NoneLow | NoneLow | NoneLow |
| Cash received | None | $50,000 | $50,000 |
| Interest over 26 years | $367,691Low | $455,120 | $403,699 |
| Balance left after 26 yearsWhat you would still owe when you expect to sell or refinance again. | $0Low | $17,131 | $0Low |
| Equity after 26 yearsHome value less the balance owed. Uses your assumed appreciation rate, which is 0% unless you change it. It is never used to remove mortgage insurance early. | $450,000Low | $432,869 | $450,000Low |
| Invested balance after 26 yearsOnly the growth on this account is credited against net cost. The contributions are money you paid in, so counting the whole balance would count them twice. | — | — | — |
| Net cost over your planned stayCash closing costs + payments made + balance still owed − cash received. Excludes property tax, insurance and HOA, which are identical across scenarios. | $687,691Low | $775,620 | $725,199 |
| Savings vs keeping your mortgageThis is not the same as interest saved: it also counts the balance you still owe at the end of your stay and any cash you paid upfront. The row above reconciles the two. | BaselineLow | -$87,929 | -$37,508 |
| Why that differs from interest saved | — | $87,429 more interest, less $50,000 of extra balance you start out owing, less $500 paid in cash at closing, plus $50,000 of cash you received — leaving you $87,929 worse off. | $36,008 more interest, less $50,000 of extra balance you start out owing, less $1,500 paid in cash at closing, plus $50,000 of cash you received — leaving you $37,508 worse off. |
| Break-even point, ours“Ahead from month 1” means there was no upfront cost to recover. “Never recovers” means the costs are never paid back. | — | Never recovers | Never recovers |
| Break-even point, conventionalUpfront cash divided by the monthly payment saving. This is the number most people mean by break-even, and it flatters a refinance: it ignores the principal you stop paying down when the term restarts. The equity-adjusted figure above is the one to rank on. | — | No monthly saving | No monthly saving |
| Time to payoff | 26 yearsLow | 30 years | 26 yearsLow |
| Total interest, full term | $367,691Low | $458,063 | $403,699 |
| Lifetime cost (interest + costs) | $367,691Low | $458,563 | $405,199 |
How to read this: “Low” marks the lowest figure among the scenarios shown and is not a recommendation. Net cost counts payments made plus the balance still owed at the end of your stay, minus cash received, which is what makes loans of different sizes and terms comparable.
Full amortization schedule
Every payment, month by month: how much goes to interest, how much retires principal, and what you still owe afterwards. The last money column is the all-in cost (principal, interest, any extra you send, mortgage insurance, property tax, homeowners insurance and HOA dues), which is what leaves your account. Switch to the annual view for a year-by-year summary. Printing and the CSV both follow whichever view you are in, so a year-by-year download gives a year-by-year file, which opens in Excel, Google Sheets and Numbers.
| Month | Payment date | Beginning balance | Payment | Principal | Interest | Extra principal | Ending balance | Cumulative interest | Mortgage insurance | Taxes & insurance | HOA | Total monthly cost | LTV |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Jan 01, 2026 | $320,000.00 | $2,204.15 | $370.82 | $1,833.33 | — | $319,629.18 | $1,833.33 | — | $562.50 | — | $2,766.65 | 71.0% |
| 2 | Feb 01, 2026 | $319,629.18 | $2,204.15 | $372.94 | $1,831.21 | — | $319,256.24 | $3,664.54 | — | $562.50 | — | $2,766.65 | 71.0% |
| 3 | Mar 01, 2026 | $319,256.24 | $2,204.15 | $375.08 | $1,829.07 | — | $318,881.16 | $5,493.61 | — | $562.50 | — | $2,766.65 | 70.9% |
| 4 | Apr 01, 2026 | $318,881.16 | $2,204.15 | $377.23 | $1,826.92 | — | $318,503.93 | $7,320.53 | — | $562.50 | — | $2,766.65 | 70.8% |
| 5 | May 01, 2026 | $318,503.93 | $2,204.15 | $379.39 | $1,824.76 | — | $318,124.54 | $9,145.29 | — | $562.50 | — | $2,766.65 | 70.7% |
| 6 | Jun 01, 2026 | $318,124.54 | $2,204.15 | $381.56 | $1,822.59 | — | $317,742.98 | $10,967.88 | — | $562.50 | — | $2,766.65 | 70.6% |
| 7 | Jul 01, 2026 | $317,742.98 | $2,204.15 | $383.75 | $1,820.40 | — | $317,359.23 | $12,788.28 | — | $562.50 | — | $2,766.65 | 70.5% |
| 8 | Aug 01, 2026 | $317,359.23 | $2,204.15 | $385.95 | $1,818.20 | — | $316,973.28 | $14,606.48 | — | $562.50 | — | $2,766.65 | 70.4% |
| 9 | Sep 01, 2026 | $316,973.28 | $2,204.15 | $388.16 | $1,815.99 | — | $316,585.12 | $16,422.47 | — | $562.50 | — | $2,766.65 | 70.3% |
| 10 | Oct 01, 2026 | $316,585.12 | $2,204.15 | $390.38 | $1,813.77 | — | $316,194.74 | $18,236.24 | — | $562.50 | — | $2,766.65 | 70.3% |
| 11 | Nov 01, 2026 | $316,194.74 | $2,204.15 | $392.62 | $1,811.53 | — | $315,802.12 | $20,047.77 | — | $562.50 | — | $2,766.65 | 70.2% |
| 12 | Dec 01, 2026 | $315,802.12 | $2,204.15 | $394.87 | $1,809.28 | — | $315,407.25 | $21,857.05 | — | $562.50 | — | $2,766.65 | 70.1% |
Showing 1–12 of 312 payments
Download any scenario
Each file is generated in your browser, and nothing is uploaded. Scenarios with a second lien include a separate block for each loan.
Anyone with this link sees these numbers. They sit in the link after the #, which browsers never send to a server, so sharing it transmits nothing to this site or anyone else’s. Nothing goes into a link until you click Share.
Educational estimates only. Not financial, tax, or lending advice. Want every option side by side instead? Open the full comparison.
What separates them?
Four things, and only one of them is the interest rate.
| HELOC | Home equity loan | |
|---|---|---|
| First mortgage | Untouched | Untouched |
| Rate type | Usually variable | Fixed |
| How the money arrives | Draw as needed, repeatedly | One lump sum at closing |
| Interest charged on | Only what you have drawn | The whole amount from day one |
| Payment predictability | Low: the rate and the draw both move | High |
| Payment step-up risk | Yes, when the draw period ends | None |
| Typical upfront cost | Low or none | Low to moderate |
| Repay early and redraw | Yes, during the draw period | No |
Structural differences only. Rates, caps, draw lengths and fees vary by lender and by product. The figures above the table are the ones you entered.
What is the payment step-up, and why does it matter most?
A HELOC's draw period frequently requires interest only, which retires none of the balance.
For ten years you can pay a small amount and owe exactly what you owed at the start. Then the line converts to a repaying loan over a shorter remaining term, and the whole balance has to be cleared inside it. The payment does not rise gently; it steps.
Because the rate is variable, it can step again. Use the rate stress field in the HELOC block to test that: set it to two or four points and read the payment after the draw period. A fixed home equity loan has no equivalent risk, and that certainty is most of what you are paying for.
Should either of these be a cash-out refinance instead?
Only if your first mortgage rate is at or above what lenders are offering today.
A cash-out refinance replaces your first mortgage entirely, so today’s rate applies to the whole balance rather than to the cash you needed. Where the existing rate is well below market, a second lien at a visibly higher rate is frequently the cheaper choice.
That three-way comparison has its own page: cash-out refinance vs HELOC vs home equity loan. This one holds the first mortgage fixed and asks only which second lien to take.