What is the main difference?

Refinance replaces your first mortgage. A home equity loan is a second mortgage—you keep your first loan and add a new one secured by your equity.

When is refinance better?

When you want to lower your rate, change your term, or do a large cash-out. Refinancing can simplify to one payment.

When is a home equity loan better?

When you have a low rate on your first mortgage and only need a smaller amount. You avoid refinancing the entire balance.

Which has lower closing costs?

Home equity loans may have lower costs than a full refinance. Compare total cost and monthly payment for your situation.

Refinance vs Home Equity Loan

Disclaimer: This website provides general mortgage and financial information for educational purposes only. It does not constitute financial, legal, or mortgage advice. Housentia is not a licensed mortgage broker, lender, or loan originator.

This content is provided for general educational purposes only and does not constitute financial, legal, or mortgage advice.

Introduction

Refinance vs home equity loan: Refinance replaces your first mortgage; a home equity loan adds a second. If your current rate is low, a home equity loan may preserve it. See Refinance vs HELOC, What Is a Second Mortgage, and What Is a Cash Out Refinance.

Frequently Asked Questions

What is the main difference?: Refinance replaces your first mortgage. A home equity loan is a second mortgage—you keep your first loan and add a new one secured by your equity.
When is refinance better?: When you want to lower your rate, change your term, or do a large cash-out. Refinancing can simplify to one payment.
When is a home equity loan better?: When you have a low rate on your first mortgage and only need a smaller amount. You avoid refinancing the entire balance.
Which has lower closing costs?: Home equity loans may have lower costs than a full refinance. Compare total cost and monthly payment for your situation.

Educational Disclaimer

This content is provided for general educational purposes only and does not constitute financial, legal, or mortgage advice.

Housentia is not a lender, mortgage broker, or loan originator.

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