Home Equity Loans vs. Refinancing: Which Is Best for Your Repairs?

Compare home equity loans and cash-out refinancing to fund home repairs and upgrades in 2025 and decide which fits your financial goals.

When tackling major home repairs or improvements, accessing your home equity is a popular option. Home equity loans and cash-out refinancing have key differences you should understand.

Home Equity Loans

• Function like a second mortgage with fixed interest rates.

• Provide a lump sum with predictable monthly payments.

• Ideal if you want to keep your original mortgage terms.

Cash-Out Refinancing

• Replaces your current mortgage with a new, larger loan.

• May lower your interest rate if rates are favorable.

• Can extend your loan term, reducing monthly payments but possibly costing more overall.

Making the Right Choice

Factors like your credit, current mortgage rate, and financial goals will influence your best option. Consulting a mortgage professional is highly recommended.

Understand your options to finance repairs effectively and choose the best fit for your situation.

Home equity loans offer fixed payments; cash-out refinancing can lower rates but may extend loan terms. Choose wisely based on your needs.