Home equity line of credit

A HELOC has two phases. During the draw period, commonly ten years, you can borrow and repay repeatedly, and many lenders require only interest payments. During the repayment period that follows, the balance amortizes and the payment steps up, often sharply.

Because the HELOC is a second lien, your first mortgage and its rate are untouched. That is the central advantage over a cash-out refinance when your existing rate is low.

The trade-off is rate risk. HELOC rates typically float with the prime rate, so both the payment and the total interest are unknown in advance. Any calculator, this one included, can only model a rate held constant.