Can you refinance a HELOC?

Ways to refinance a HELOC

A HELOC can be refinanced in four common ways, and the CFPB's HELOC booklet names the first one directly: a balloon or end-of-draw balance can be handled by refinancing it with the lender, by getting a loan from another lender, or by some other means.^[1] The same booklet notes that some lenders let you convert a variable rate to a fixed rate, or turn all or part of the line into a fixed-term installment loan.^[1]

A home equity loan is a lump sum, usually at a fixed rate; a HELOC is a revolving line whose payment varies with the balance and an adjustable rate.^[3] Refinancing a line into a loan therefore trades flexibility for a predictable payment. Compare the two products in more detail on home equity loan vs. HELOC.

Why people refinance a HELOC at the end of the draw

Most refinancing happens because the payment jumps when the draw period ends. The CFPB warns that monthly payments are often significantly higher once you enter repayment,^[2] and federal regulators told banks that borrowers "could face substantial payment shock" when they start amortizing principal, and that lenders should work with troubled borrowers to avoid unnecessary defaults.^[4] On a $60,000 balance at 8.00%:

See the jump for your own line in the HELOC payment calculator, or plan to shrink it before the draw ends with the HELOC payoff calculator.

Worked example: HELOC to a fixed home equity loan

Refinancing into a longer fixed loan lowers the payment but usually raises total interest. With the defaults above:

1. Staying in a 10-year repayment at 8.00% costs $727.97 a month and $27,356 of interest in total.
2. A 20-year home equity loan at 8.25% costs $511.24 a month, $216.73 less, but $62,697 of interest over its life.
3. The $1,000 of costs are recovered by the lower payment in 5 mo.
4. After 10 years you would have paid less each month but still owe $41,682 on the new loan, while the old line would be paid off. Counting both, you are $16,675 worse off at that point.

A 15-year term at the same rate ($582.08 a month) sits between the two. If cash flow is the problem, the longer term solves it; if total cost is the problem, a shorter term or extra payments do.

Refinancing a HELOC with a cash-out refinance

Rolling the line into a new first mortgage combines two payments into one, but it also replaces the rate on your existing mortgage. That matters when the mortgage was taken out at a low rate:

Here the single loan costs more each month and restarts a 30-year clock, because 7.11% (Freddie Mac's 30-year average for the week of Nov 12, 2026)^[7] is far above the old 3.25% rate. A cash-out refinance tends to make sense only when the new rate is close to or below the old one. The HELOC LTV calculator shows how much equity a lender would see in the home either way.

When refinancing a HELOC does not help

• A new interest-only line resets the draw period but repays nothing; the balance and the eventual payment jump come back larger if you keep drawing.
• A longer term at a similar rate lowers the payment but adds years of interest, as the worked example shows.
• Losing a low first-mortgage rate in a cash-out refinance can cost more than the HELOC itself.

Interest on the new loan is only deductible if the money was used to buy, build or substantially improve the home; see is HELOC interest tax deductible. If the line was used for a project, the home improvement loan calculator compares the ways to finance it.