Debt Consolidation Calculator: Cash-Out Refinance or HELOC
Putting credit cards and other loans into your home loan can shrink your monthly bills. But paying over more years can cost more interest. Add your debts and compare both numbers.
Step 1: Your debts today
We filled in sample debts. Swap in yours, or add more.
Step 2: The new loan
A cash-out refinance also pays off your current mortgage, so add it here.
How the math works
For each debt, we find how long it will take to pay off at your current payment and how much interest that costs. Then we add all the debts, plus any closing costs, into one new loan and find its payment.
If you choose a cash-out refinance, your current mortgage gets paid off and rolled into the new loan too. That is a big deal if your mortgage rate is low right now.
The new loan's total interest includes closing costs you add in. HELOC rates often change, and many HELOCs start with interest-only payments. To keep it simple, this tool uses one fixed rate and a normal payment.
A worked example
A $5,000 credit card at 18% with a $200 monthly payment takes 32 months to pay off. It costs about $1,314 in interest. A $35,000 loan at 8.5% for 10 years has a payment of about $433.95 a month.
Before you decide
- Credit cards are not tied to your house. A HELOC or cash-out refinance is. If you miss payments, your home could be at risk.
- A smaller payment over more years can cost more interest.
- It only works if the cards don't fill back up.
Common questions
Is using home equity to pay off debt a good idea?
Sometimes. It can lower your rate and monthly payment. But the debt is now tied to your home, and more years can mean more interest. Look at both numbers first.
How is a cash-out refinance different from a HELOC?
A cash-out refinance swaps your mortgage for a new, larger one and gives you the extra as cash. A HELOC is a separate line of credit, and your current mortgage stays the same.
How can my payment go down but my interest go up?
Spreading debt over more years means more months of interest. A small payment for a long time can cost more than a big payment for a short time.
Should I give up a low mortgage rate to pay off cards?
Think carefully. A cash-out refinance changes the rate on your whole mortgage. If your rate is low, a HELOC that keeps it may cost less. Use this tool to compare.
Will this help my credit score?
It can lower how much of your card limits you use, which may help. A new loan or closing old cards can also change your score. Everyone is different.
Want to see your real options?
Mark can check what a HELOC or a cash-out refinance would look like for you.
Estimates only. Not a loan offer. These numbers come from simple math and what you type in. They are not a pre-approval, a rate quote, or a promise to lend. Your real rate, payment, and costs depend on your credit, income, home, loan type, and more. Not everyone will qualify. Using your home as security means your home could be at risk if you can't make the payments. Mark Jost, Mortgage Loan Originator, NMLS #150914. Heathrow Mortgage, Company NMLS #1849599. Equal Housing Opportunity.