Refinance vs HELOC

Introduction

Refinance vs HELOC: Refinance replaces or modifies your first mortgage. A HELOC is a revolving line of credit. Use refinance to lower your rate or get a lump sum; use a HELOC for flexible borrowing. See HELOC Overview, Refinance vs Home Equity Loan, and What Is a Cash Out Refinance.

Frequently Asked Questions

What is the main difference?

Refinance replaces your first mortgage or adds a new one. A HELOC is a revolving line of credit—you borrow as needed and pay interest only on what you use.

When is refinance better?

When you want to lower your rate, lock in a fixed payment, or need a large lump sum. Refinance gives you a new first mortgage or cash-out.

When is a HELOC better?

When you need flexible access to funds over time (e.g., ongoing projects), or when you want to preserve your current first mortgage rate.

Do HELOCs have variable rates?

Most HELOCs have variable rates tied to an index. Refinances can be fixed or adjustable. Consider rate risk when choosing.