Cash out refi vs HELOC after my rate changed from 3.5% to 7%

I locked in a cash out refi at 3.5% back in 2021, but now my bank is saying I'd get 7% if I wanted to do another one. My buddy says a HELOC is better because you keep the low rate on the original loan. Has anyone run the numbers and figured out which one wins in this market?

2 comments

2 Comments

riley_price10d ago

Honestly, I saw a YouTube video from a real estate guy that broke this down and he said the HELOC usually wins if you don't need the lump sum all at once. Ngl, keeping that 3.5% on the first mortgage is a huge win in this market.

paige_ellis599d ago

Yeah that video totally shifted how I look at this stuff. I used to think a full cash-out refi was the only way to go no matter what, but that advice about keeping the low rate is hard to argue with. Ngl, I was one of those people who just assumed lump sum was always better, but the HELOC makes way more sense for smaller projects now that I get it. It's wild how much money you can save by not touching that first mortgage rate.