Cash-Out Refinance vs. HELOC: Tapping Home Equity

# Cash-Out Refinance vs. HELOC Both let you convert equity into cash, but they work very differently. ## Cash-Out Refi Replaces your existing mortgage with a larger one. Fixed rate. Best when today's rates beat your current rate. ## HELOC A second loan / line of credit. Variable rate. Best when your existing mortgage rate is already low. ## The rate environment matters In 2026, borrowers with 3% legacy mortgages usually prefer a HELOC. Newer borrowers with 6%+ rates often benefit from a cash-out refi.