You locked in a great rate. You don't have to give it up to put your equity to work. See how a HELOC or a fixed home equity loan lets you keep your first mortgage exactly where it is.
If you bought or refinanced when rates were low, your first mortgage is one of your best financial assets — and a cash-out refinance would mean trading that low rate away on your entire balance. For most homeowners, that math doesn't work anymore.
A second lien — a HELOC or a fixed home equity loan — sits behind your first mortgage. Your low rate stays untouched, and you only pay a market rate on the slice of equity you actually use. Here's how the two compare.
Not sure which fits? That's exactly the kind of thing worth a five-minute conversation. As a broker I shop this across multiple lenders — comparing real numbers across all of them to find your best fit, instead of one bank’s single answer.
This is the Federal Reserve’s published Prime Rate index (Fed H.15), shown for market context only — it is not a quoted or personalized rate for any product.
Estimates only · Not an offer or commitment to lend · Assumptions shown below
Based on an 85% CLTV cap and an illustrative 8.50% rate over 20 years. Your first mortgage stays in place — these figures apply only to the new second lien.
Fund a kitchen, roof, or addition — and potentially add value to the home you're improving.
Roll high-interest cards or loans into one lower-rate, secured payment. Run the numbers
Tap equity for a second home or an investment purchase without disturbing your primary loan.
Open a HELOC as a standby safety net — available if you need it, costing nothing until you draw.
Tools set expectations. I give you the straight answer for your situation. Let's look at the real numbers together.
No. A HELOC or home equity loan is a separate second lien that sits behind your first mortgage. Your existing rate, balance, and payment stay exactly as they are.
Most programs allow your first mortgage plus the new line/loan to reach roughly 80–90% of your home's value (the CLTV). The calculator above estimates that band — your actual limit depends on credit, income, property, and the lender's guidelines.
It depends on whether your need is ongoing/uncertain (HELOC's flexibility) or a known one-time amount you want a fixed payment on (home equity loan). I'll compare both across lenders so you can see the trade-offs side by side.
Sometimes — generally when the funds are used to buy, build, or substantially improve the home securing the loan, subject to IRS limits. This isn't tax advice; please confirm with your tax professional.