Mortgage Refinance vs HELOC 2026: Which Is Better for You?
Mortgage Refinance vs HELOC 2026: Which Is Better for You? Need cash from your home equity? You have two main options: mortgage refinance or HELOC (Home Equity Line of Credit). This guide compares them — costs, pros/cons, and which is better for your situation. What Is Mortgage Refinance? Replace your current mortgage with a new one (new rate, new term, new payment). Cash-out refinance: Borrow more than you owe, get difference as cash. Example: Owe $200K, home worth $400K → refinance $250K → get $50K cash. Rate-and-term refinance: Change rate/term, no cash out. Costs: 2-5% of loan (closing costs). Rate: Fixed (6-7% in 2026). What Is a HELOC? Revolving line of credit secured by home equity. Like a credit card backed by your home. How it works: Borrow up to limit, repay, borrow again (during draw period, 5-10 years). Example: Home worth $400K, owe $200K → HELOC limit $120K (80% LTV - $200K). Costs: $0-$500 (application, appraisal). Rate: Variable (8-10% in 2026, Prime + mar...