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Talk through keeping your mortgage, adding a home equity line or replacing it with a cash out refinance.
Book a Discovery CallHome Equity Cash Flow Review
Cash out or an equity line?
Give your monthly cash flow a plan.
See what you are paying every month now. Then compare an illustrative equity line strategy with a single cash out mortgage and understand what each option could mean for your monthly cash flow.
Start with your real monthly payments
Compare four strategies
See the tradeoffs before deciding
What would you do with more monthly breathing room?
Keep it available. Put extra toward your mortgage. Or explore an investment illustration. Compare the tradeoffs before choosing.
Try the calculatorCompare Your Monthly Cash Flow
The starting numbers are illustrative. Change them to explore monthly cash flow, then choose how much of the difference to put toward principal or investments. No email required.
Rate’s HELOC terms may differ from this example. Ready to explore? See your next steps.
1. What are you paying for your home today?
Start with the basics. This lets us compare your current structure with the other options.
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An estimate is fine.
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Include principal, interest, taxes, homeowners insurance and any mortgage insurance.
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Enter the amount already included in the mortgage payment above.
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Enter the actual amount. Zero does not mean it is not required.$
2. What else are you paying every month?
Enter the balances and the monthly payments. Select the debts you would want us to compare against your equity.
Current monthly debt payments entered$0
Total debt balances entered$0
Credit cards
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Auto loans
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Personal or student loans
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Other monthly debt
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3. Set the assumptions for the comparison
These are educational estimates only. Actual pricing, payment structure, qualification and closing costs will vary.
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The equity line estimate uses an interest only draw period payment for comparison.
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Confirm if required. Not determined by this tool.4. Your preliminary cash flow comparison
This shows how the same debts can affect monthly cash flow differently depending on how they are structured.
Your estimated monthly housing and debt payments today
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That includes $0 in monthly debt payments outside of the mortgage.
Option 1
Keep Everything As Is
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Estimated monthly housing and debt payments
No new loan and no payment change
- Keeps your existing mortgage and current rate
- No new lien or refinance transaction
- Higher cost debt continues on its current schedule
Option 2
Keep First Mortgage + Equity Line
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Estimated monthly housing and debt payments
Estimated savings $0 per month
- Keeps your existing first mortgage in place
- Can be attractive when the current first mortgage rate is lower
- Equity line rates are commonly variable and payments can change
- This estimate uses an interest only draw period payment
Option 3
One Cash Out Mortgage
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Estimated monthly housing and debt payments
Estimated savings $0 per month
- Replaces the first mortgage and selected debts with one new mortgage
- Can simplify the monthly payment structure
- May reset the repayment timeline and increase total interest over time
- Can be less attractive when replacing a much lower first mortgage rate
Option 4
Put the Savings to Work
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Initial monthly outflow, including your allocation
Keep $0 in your monthly budget
Second mortgage means the new equity line.
Adjust extra payment or source
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Start with the equity line or cash out option
See what that choice could change over time
Apply the monthly difference to principal or an investment
Option 4 includes the amount you choose to put toward principal or investments. The other columns show loan and debt payments only. All totals are initial monthly estimates.
Monthly payment comparison
Today
Equity line
Cash out
Put to work
Housing payment
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$0
$0
$0
Other debt payments
$0
$0
$0
$0
New equity line payment
$0
$0
$0
$0
Principal or investment allocation
$0
$0
$0
$0
Total monthly outflow
$0
$0
$0
$0
Initial monthly budget room vs. today
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$0
$0
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The lowest payment is not automatically the best strategy.
Monthly savings are only one part of the decision. Your current mortgage rate, total interest, new loan term, closing costs, available equity and how quickly you plan to repay the debt all matter.
Option 4 / Your money, with a plan
What could your monthly payment difference do?
Keep some breathing room today. Put the rest toward principal or an investment. This uses the difference from Option 2 or 3, not a fourth loan.
Choose the loan to pay down.
Compare the same extra monthly amount on one loan at a time.
Confirm the first mortgage payment used for payoff
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Prefilled from your mortgage payment minus taxes, homeowners insurance and entered mortgage insurance. Confirm against your statement. Exclude mortgage insurance, fees and any extra principal you already pay.
Estimated remaining first mortgage termNeeds review
This input updates only the payoff illustration in Option 4. It does not change the total housing payment in the first three options. The remaining term is estimated from your current balance, rate and principal and interest payment. Your existing mortgage is not restarted as a new 30 year loan.
Initial monthly difference$0
Put toward principal$0
Keep in your budget$0
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You can use part or all of the estimated monthly difference.
Your loan balance over time
See the year by year breakdown
Calculation assumptions and important tradeoffs
Principal method. Choose the first mortgage or the second mortgage. The second mortgage in this calculator is the new equity line. With a cash out refinance, the target is the new first mortgage and there is no separate second mortgage in that option. The chosen extra amount is applied to the selected loan only; the other mortgage stays on its regular schedule. Extra payments stop at payoff and are capped at the remaining balance. There is no automatic rollover to the other loan or an investment after payoff. Interest savings compare the selected loan with and without the same extra principal plan. They are not a comparison with the original mix of debts. No recast is assumed. The existing first mortgage uses a constant principal and interest payment and rate; its remaining term is inferred from its current balance, not reset to 30 years. Taxes and insurance are not principal payments and may continue after payoff.
Investment method. Contributions start at the end of month one with a zero starting investment. The assumed effective annual return is converted to an equivalent monthly rate. Contributions remain fixed for the selected horizon. Taxes, fees, inflation and market volatility are excluded. Investment returns can be negative, and the projected account balance is not a net worth increase or a guaranteed benefit from borrowing. Investment contributions do not pay down the loan.
Monthly budget. The cash flow difference is the initial payment difference, not new income or guaranteed lifetime savings. Your original debts may end sooner, rates and taxes may change, and equity line payments may rise after the draw period. Future affordability must be reviewed separately. The amount allocated is subtracted from what remains in your monthly budget, so the same dollars are never shown as both spendable cash and invested money.
Loan assumptions. Rates stay constant for this illustration, although actual equity line rates may vary. No future draws, prepayment penalties, new debt or future refinancing are modeled. Financed costs entered above are included in the loan balances. Existing liens, qualification, exact payment terms and all costs need lender review. The loan to value setting is an illustrative screen, not an approval or a published program limit.
References: SEC Investor.gov compound interest calculator and CFPB home equity line of credit guide. See also CFPB principal and interest explanation and CFPB guidance on extra principal payments.
This is an initial cash flow screen. The payoff illustration compares one selected loan with and without extra principal, not the total cost of consolidating your original debts. Existing second liens need a separate review. Compare direct repayment, creditor hardship options and nonprofit credit counseling too. Moving federal student debt into a mortgage can remove repayment protections and secure that debt with your home.
Compare total borrowing costs and balances across all three loan strategies
Want Eric to verify which strategy actually makes sense?
We will review the numbers, compare the tradeoffs and tell you if leaving everything alone is the better answer.
Get my personal comparisonAsk Eric for a Discovery Call. Choose whether to include your calculator inputs in the request below. No application is required.
Why an equity line may help
An equity line can let you leave your current first mortgage alone while using a separate line against the home to reorganize selected debt.
- Potentially preserve a lower first mortgage rate
- Replace several monthly debt payments with one additional housing related payment
- Create monthly cash flow if the new payment is lower
- Maintain flexibility if the line allows future draws
Why one cash out mortgage may help
A cash out refinance can combine the existing first mortgage and selected debts into one new mortgage payment.
- Simplify multiple payments into one loan
- Potentially create a larger monthly cash flow change
- Use longer mortgage amortization to lower required monthly outflow
- Compare convenience and cash flow against the cost of replacing the current mortgage
The important part
A lower monthly payment does not always mean a lower total cost.
A strategy can lower the required monthly payment while extending the time it takes to repay the debt. That is why the full review matters.
Why would I use an equity line instead of refinancing?
One reason is to preserve an existing first mortgage that has a favorable rate. The equity line is separate, but its rate may be variable and its payment can change.
Why would I consider one cash out mortgage?
It can simplify the structure by combining the first mortgage and selected debts into one payment. The tradeoff is that you are replacing the entire first mortgage and potentially restarting the amortization period.
Does a lower payment mean I am saving money?
Not necessarily. This calculator shows potential monthly cash flow difference. Total interest and total cost depend on the final loan terms, fees and how long the debt remains outstanding.
Can the best answer be to do nothing?
Yes. If the cost, rate or long term tradeoff does not improve your financial position, keeping your current structure can be the right answer.
YOUR NEXT STEP
See the example. Make a plan for you.
Which numbers fit your life? Eric can help you look at the payment, the cash you keep and what could change next.
- 1Explore an example
- 2Choose what to share
- 3Plan a Discovery Call
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