Free 2026 decision tool
How should I finance my renovation?
Compares HELOC vs Home Equity Loan vs Cash-Out Refinance vs Personal Loan side-by-side for your specific situation. Includes the rate-reset trap most cash-out refi calculators ignore, plus closing costs and credit-score-adjusted rates. No email gate.
Your situation
Current LTV: 42% · Available equity: $181,250
Critical input — drives the cash-out refi rate-reset trap detection.
Personal loans cap at 7 yrs regardless of selection.
Lowest all-in cost
Home Equity Loan
Home Equity Loan is the lowest all-in cost for your situation. Estimated total: $22,997 (interest + closing).
Side-by-side comparison
| Option | Rate | Monthly | All-in cost |
|---|---|---|---|
| Home Equity LoanWINNER | 8.40% | $567 | $22,997 |
| Personal Loan | 12.40% | $812 | $23,214 |
| HELOC | 9.85% | $591 | $26,139 |
| Cash-Out Refinance | 7.30% | $2,073 | $213,137 |
All-in cost = total interest over the loan term + closing costs + (cash-out refi only) rate-reset penalty on existing mortgage balance.
Risk callouts & insights
Cash-out refi trap: rate-reset penalty
Your existing mortgage rate (3.5%) is far below current cash-out rates (~7.4%). Refinancing means you pay the new rate on your ENTIRE balance, not just the cash-out portion. Estimated rate-reset cost over 10yr: $65,060. Almost always a bad trade if your original rate is <5%.
Home equity interest may be tax-deductible
Under the 2026 IRS rules, interest on home equity loans/HELOCs is deductible IF the funds are used to "buy, build, or substantially improve" the home that secures the loan — which a renovation typically qualifies for. Save your project receipts as documentation. (Personal loan interest is never deductible.)
Compare actual loan offers — free, no credit pull
Our calculator gives you the model. We'll match you with 3 vetted lenders who can give you real rates for your situation (soft credit pull only). No spam, no hard inquiries until you say yes.
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Where this calculator helps
- •You have a renovation budget and want to compare HELOC vs home equity loan vs cash-out refi vs personal loan in one place, with YOUR numbers.
- •You currently have a sub-5% mortgage and are considering cash-out refi — the calc surfaces the "rate-reset trap" (cost of giving up your low rate) most calculators ignore.
- •Your credit score is borderline (660–720) and you want to see how the different products price for your tier.
- •You're equity-constrained (LTV >80%) and need to see which products are viable vs which will get denied outright.
- •You're a real-estate agent or financial advisor helping a client choose between loan products and want a defensible side-by-side.
FAQ
What's the cash-out refi "rate-reset trap"?
If you locked in a 3.5% mortgage in 2021, a cash-out refi today wipes that out and replaces it with the current ~7% rate on your ENTIRE outstanding balance, not just the cash-out portion. The calculator quantifies this penalty as "rate-reset cost" — often $50,000-$150,000 in extra interest over the life of the loan. Most consumer-facing refi calculators hide this.
When is a HELOC better than a home equity loan?
HELOC wins when (1) you're drawing money over time, not all at once (e.g. multi-phase renovation); (2) you want flexibility to pay back early without prepayment penalties; (3) you can tolerate a variable rate. Home equity loan wins when you want fixed rate + fixed payment + lump-sum disbursement.
Are personal loans ever the right choice for renovations?
Only for small projects ($5K–$25K) AND when you have strong credit (760+). Personal loans have higher rates than secured products (HELOC/HEL) but no closing costs and faster funding (1–3 days vs 4–6 weeks). For a $10K kitchen refresh, a 7% personal loan often beats a 6% HELOC after the HELOC's ~$1,500 closing costs.
How much equity do I need?
Most lenders require 80% combined LTV (your existing mortgage balance + new loan ≤ 80% of home value). Some accept 85% CLTV with PMI or a price premium. The calculator's "available equity" line shows the maximum you can borrow against your home before hitting the LTV ceiling.
Does my credit score actually move the rate that much?
Yes. Going from 720 → 760 is typically worth 50bps (half a percent) on HELOC + HEL pricing. 800+ unlocks the lowest-tier rates. The calculator applies tier-appropriate spreads off the wholesale rate so you see the realistic price for YOUR credit band, not a teaser.
Is this calculator's math accurate?
Yes — we use standard amortization math (PMT formula) for all four products, calibrated to 2026 wholesale rates from MBS Highway + FRED + Bankrate as of the last build. The rate-reset cost is a forward-looking projection based on standard mortgage amortization; the all-in cost includes closing costs by product. Source detail is in /methodology.
How this calculator works
Rate quotes use 2026 national-average baselines: HELOC ~9.2% (variable, prime + 1.5%), Home Equity Loan ~8.5% (fixed), Cash-Out Refi ~7.4% (30-yr fixed), Personal Loan ~12.5% (unsecured). Credit-score band adjusts the rate by -0.4% (780+) to +2.5% (sub-660). Closing costs: HELOC ~$0-$750 (often waived), Home Equity ~1-3%, Cash-Out Refi 2-5%, Personal Loan 0-5% origination fee. Cash-Out Refi rate-reset penalty: if your current mortgage rate is materially below the new cash-out rate, refinancing means you pay the new rate on your ENTIRE balance (not just the cash-out portion). We compute this delta and add it to the all-in cost — most calculators ignore this and mislead borrowers who currently hold sub-4% mortgages. Available equity: capped at 85% combined LTV (CLTV) — most lenders won't exceed this in 2026.
This calculator is informational only — actual loan offers depend on your specific lender's underwriting, debt-to-income ratio, employment history, and housing market conditions. Get 3 written offers before signing anything.