Two ways to borrow against your home
A cash-out refinance and a home equity loan both turn your home’s equity into cash. The difference is what happens to the mortgage you already have.
- Cash-out refinance: one new, larger loan replaces your current mortgage, and you receive the difference in cash. You get a new rate, term and payment on the whole balance.
- Home equity loan: you keep your current mortgage and add a second, fixed-rate loan with its own payment.
How much you can borrow
With a cash-out refinance, the amount depends on your home’s value, what you owe and the loan program. Many conventional programs cap the new loan at about 80% of your home’s value.
A CapCenter home equity loan runs from $50,000 to $250,000, with a fixed rate for 15, 20 or 30 years. How much you can borrow depends on your home’s value and what you owe. CapCenter home equity loans are available on one-unit single-family primary residences and second homes.
Which one fits
- If your current mortgage rate is low, a home equity loan lets you keep it on your existing balance.
- If your current rate is close to today’s rates, or higher, one cash-out loan can cost less overall.
- If you need more than a home equity loan allows, a cash-out refinance may fit better.
Home equity loan rates are usually higher than first-mortgage rates, but they apply only to the new amount you borrow.
Compare total interest, not just the rate
A lower rate doesn’t by itself mean a lower cost. Look at the total interest you’d pay over the time you expect to keep each loan, along with each monthly payment. Our quote compares both options and recommends one.
ZERO Closing Costs on both
Both come with ZERO Closing Costs (restrictions apply; see Offer details). For a cash-out refinance on a second home or investment property, ask your loan consultant whether ZERO Closing Costs applies. Escrow deposits and prepaid interest aren’t covered.
