Monthly Breathing Room Calculator 💨
Could using home equity help your budget? Let's look at the whole picture — payment relief, repayment time, and borrowing cost together. A smaller payment can help a household, but stretching debt over more years can increase its total cost.
1 What are you paying now?
Add as many debts as needed. Balance and rate aren't enough — we need the payment to show breathing room and estimate payoff time. Check "Pay off with equity" to include a debt in the equity-route comparisons.
2 Tell us about your home
Separating payment pieces prevents comparing today's full mortgage payment with only a new loan's principal & interest. Taxes, insurance, MI, and HOA are household costs — not debt principal.
Available equity is an estimate. Actual borrowing limits depend on the loan program and your eligibility.
Understand your options
Three common ways to tap home equity. Each works differently — here's what to know before exploring the routes below.
A credit line secured by your home that lets you borrow up to an approved limit during a draw period. It usually has a variable interest rate. When you keep your existing mortgage, the HELOC adds a separate payment. Payments can increase when repayment begins.
A lump-sum loan secured by your home, with a fixed interest rate and scheduled payments. When you keep your existing mortgage, this adds a separate loan payment.
A new, larger mortgage that replaces your existing mortgage and provides additional funds, after payoffs and costs. The new rate and term apply to the entire replacement mortgage — not just the extra money borrowed.
3 Explore your possible routes
Editable assumptions, clearly labeled as illustrations — not loan offers.
A cash-out refinance replaces your existing mortgage, so the new rate applies to the whole replacement balance (including financed costs).
HELOCs usually have variable rates — payments can rise substantially when the draw period ends. Percentage fees use the actual new loan amount, not home value.
4 What changes for your household?
Over 5 years. The remaining-balance comparison matters — you could pay less each month while still owing more later.
These are the three questions that matter most. A smaller payment can help a household, but stretching debt over more years can raise its total cost and leave more owed later. Lower is not automatically better — it depends on your goals and budget.
★What if I keep paying what I pay today?
Under this view, you make the modeled required payments and keep the difference in your budget each month — up to $581/mo of breathing room.
What this could mean for you
Under these assumptions, the HELOC route could reduce your initial required monthly payments by approximately $581, with no modeled upfront fees.
However, interest continues to accrue, and after 5 years the amount you could still owe on this route is $320,886 — compare that against keeping your current loans before deciding.
Lowest estimated 5-year borrowing cost: Keep Current Loans. Lowest remaining debt at 5 years: Keep Current Loans.
Using home equity moves debt into a loan secured by the home — it doesn't erase it. A smaller payment can help, but stretching debt over more years can raise its total cost. This is an educational estimate, not a commitment to lend. All loans are subject to credit approval and underwriting guidelines.
What about taxes?
Using home equity does not automatically make interest tax-deductible. Interest on funds used to pay credit cards, auto loans, or other personal debts generally is not deductible as home mortgage interest. Interest on qualifying funds used to buy, build, or substantially improve the home securing the loan may be deductible if you itemize and meet IRS requirements. For a cash-out refinance, the portion replacing qualifying existing mortgage debt may still qualify. Ask a qualified tax professional about your situation.
This calculator does not include potential tax benefits. See IRS home mortgage interest guidance.