Equity & timing options, side by side

The routes people most often look at for: renovate or add space instead of moving.

These are not tiers of the same product.A HELOC is a debt with a rate and a payment. A shared-equity agreement sells a slice of your home's future value. A rent-back is a negotiated contract term. Comparing them in one table is useful — but the right one depends on your situation, not on which looks cheapest in any single row.

Show all options instead →

Borrow against your equity

HELOC (home equity line of credit)

Mortgage lender

A revolving credit line secured by your home — draw what you need, when you need it.

The lender approves a credit limit based on your equity and credit. You draw against it during a set draw period, repay, and can draw again. You only owe on what you have actually drawn.

New monthly payment: Yes — a new payment once you draw, and it can rise when the draw period ends.
Rate structure: Usually variable, so the payment can change over time. Some lenders offer fixed-rate lock options on portions of the balance.
Claim on the home: Second lien behind your existing mortgage, unless you have no mortgage.
How it is repaid: Interest-only payments are common during the draw period, followed by a repayment period where principal is added. The balance is due in full when you sell.
When it comes due: At the end of the repayment period, or immediately on sale of the home.
Getting out early: Generally allowed, but closing the line early within the first few years can trigger a fee at some lenders.
Cost shape: Application, appraisal, and closing costs are common; some lenders waive them but add an early-closure fee. Annual fees exist at some lenders.

What it requires

Enough equity to satisfy the lender
Income and credit qualification
Usually opened before you list the home

Main risks

Your home secures the debt — missed payments can lead to foreclosure.
A variable rate means the payment can rise.
Lenders can freeze or reduce a line if home values or your credit change.
Carrying it while also holding a new mortgage means two obligations at once.

Official reference: CFPB — mortgages and home equity

Home equity loan (second mortgage)

Mortgage lender

A one-time lump sum secured by your home, repaid on a fixed schedule.

You borrow a set amount against your equity and receive it at closing. The loan amortizes over a fixed term alongside your existing first mortgage, which stays untouched.

New monthly payment: Yes — a predictable second payment starting immediately.
Rate structure: Usually fixed, so the payment does not change.
Claim on the home: Second lien behind your existing mortgage.
How it is repaid: Fixed monthly principal and interest from the first month. The remaining balance is due on sale.
When it comes due: End of the fixed term, or on sale of the home.
Getting out early: Usually allowed; check the note for any prepayment penalty.
Cost shape: Closing costs similar to a smaller mortgage — origination, appraisal, title.

What it requires

Enough equity
Income and credit qualification
A known amount — you cannot draw more later

Main risks

Your home secures the debt.
You pay interest on the full amount from day one, even if you needed it gradually.
Two payments if you also take a new mortgage.

Official reference: CFPB — mortgages and home equity

Cash-out refinance

Mortgage lender

Replace your current mortgage with a larger one and take the difference in cash.

A new first mortgage pays off the old one and returns the difference to you at closing. Your entire mortgage is repriced at the new rate — not just the cash you take out.

New monthly payment: Yes, and it replaces your old one — often larger, and at a different rate than the loan you gave up.
Rate structure: Whatever the new mortgage carries. This is the crux: if your existing rate is low, refinancing gives it up on the whole balance.
Claim on the home: First lien — it becomes your only mortgage.
How it is repaid: One monthly payment on the new, larger loan.
When it comes due: End of the new loan term, or on sale.
Getting out early: Usually allowed.
Cost shape: Full mortgage closing costs on the entire new loan amount.

What it requires

Enough equity after the cash-out
Full mortgage underwriting
Willingness to give up your current rate

Main risks

Losing a low existing rate across your whole balance is often the single largest cost, and it does not appear as a fee.
Resets the clock on how long you will be paying.
Your home secures everything.

Official reference: CFPB — mortgages and home equity

Finance a renovation

FHA 203(k) rehabilitation mortgage

Mortgage lender

A government-insured mortgage that finances the purchase or refinance plus the renovation in one loan.

The loan is based on the home’s value after the planned improvements. Renovation funds are held and released as work is completed, with required oversight of the work.

New monthly payment: Yes — a single mortgage payment.
Rate structure: Standard mortgage rate structure for the product, plus FHA mortgage insurance.
Claim on the home: First lien.
How it is repaid: One monthly mortgage payment covering both the home and the renovation.
When it comes due: Normal mortgage term.
Getting out early: Normal mortgage rules.
Cost shape: Mortgage closing costs, FHA mortgage insurance, plus fees tied to the renovation oversight and draws.

What it requires

An FHA-approved lender that actually does 203(k) — many do not
Contractors and a scope of work that meet the program’s requirements
Patience: draws, inspections, and paperwork take time

Main risks

The process is slower and more paperwork-heavy than a standard mortgage.
Work must follow the approved scope; changes are not simple.
Confirm current rules with the lender and the official source — program details change.

Official reference: HUD — 203(k) rehabilitation mortgage insurance

Fannie Mae HomeStyle Renovation

Mortgage lender

A conventional mortgage that finances renovation costs alongside the home.

Similar in shape to 203(k) but conventional rather than FHA-insured: the loan is underwritten against the post-renovation value, with renovation funds released as work progresses.

New monthly payment: Yes — a single mortgage payment.
Rate structure: Conventional mortgage terms; private mortgage insurance may apply depending on the down payment.
Claim on the home: First lien.
How it is repaid: One monthly mortgage payment.
When it comes due: Normal mortgage term.
Getting out early: Normal mortgage rules.
Cost shape: Mortgage closing costs plus renovation administration and inspection costs.

What it requires

A lender offering the product
Conventional credit qualification
An approved renovation scope and contractor

Main risks

Fewer lenders offer it than offer standard mortgages.
Renovation scope and contractor requirements constrain what you can do.
Confirm current eligibility and limits with the lender.

Official reference: Fannie Mae — HomeStyle Renovation

All of it in one table

Scroll sideways to compare. Terms vary by lender and by contract — these are the shapes, not quotes.

Equity and timing options compared by payment, rate structure, claim on the home, repayment, due date, early payoff, and cost shape
	HELOC (home equity line of credit)	Home equity loan (second mortgage)	Cash-out refinance	FHA 203(k) rehabilitation mortgage	Fannie Mae HomeStyle Renovation
What it is	A revolving credit line secured by your home — draw what you need, when you need it.	A one-time lump sum secured by your home, repaid on a fixed schedule.	Replace your current mortgage with a larger one and take the difference in cash.	A government-insured mortgage that finances the purchase or refinance plus the renovation in one loan.	A conventional mortgage that finances renovation costs alongside the home.
New monthly payment?	Yes — a new payment once you draw, and it can rise when the draw period ends.	Yes — a predictable second payment starting immediately.	Yes, and it replaces your old one — often larger, and at a different rate than the loan you gave up.	Yes — a single mortgage payment.	Yes — a single mortgage payment.
Rate structure	Usually variable, so the payment can change over time. Some lenders offer fixed-rate lock options on portions of the balance.	Usually fixed, so the payment does not change.	Whatever the new mortgage carries. This is the crux: if your existing rate is low, refinancing gives it up on the whole balance.	Standard mortgage rate structure for the product, plus FHA mortgage insurance.	Conventional mortgage terms; private mortgage insurance may apply depending on the down payment.
Claim on the home	Second lien behind your existing mortgage, unless you have no mortgage.	Second lien behind your existing mortgage.	First lien — it becomes your only mortgage.	First lien.	First lien.
How it is repaid	Interest-only payments are common during the draw period, followed by a repayment period where principal is added. The balance is due in full when you sell.	Fixed monthly principal and interest from the first month. The remaining balance is due on sale.	One monthly payment on the new, larger loan.	One monthly mortgage payment covering both the home and the renovation.	One monthly mortgage payment.
When it comes due	At the end of the repayment period, or immediately on sale of the home.	End of the fixed term, or on sale of the home.	End of the new loan term, or on sale.	Normal mortgage term.	Normal mortgage term.
Getting out early	Generally allowed, but closing the line early within the first few years can trigger a fee at some lenders.	Usually allowed; check the note for any prepayment penalty.	Usually allowed.	Normal mortgage rules.	Normal mortgage rules.
Cost shape	Application, appraisal, and closing costs are common; some lenders waive them but add an early-closure fee. Annual fees exist at some lenders.	Closing costs similar to a smaller mortgage — origination, appraisal, title.	Full mortgage closing costs on the entire new loan amount.	Mortgage closing costs, FHA mortgage insurance, plus fees tied to the renovation oversight and draws.	Mortgage closing costs plus renovation administration and inspection costs.

Who to ask about which

A lender — whether you qualify, whether their loan allows recasting, and how they treat expected rental income.
A HUD-certified counselor — free, and the right first call if the numbers are tight. Find one →
An attorney — before signing a shared-equity agreement, a rent-back, or any contract that is not a standard mortgage.
A tax professional — before converting a home to a rental or taking cash out.

Educational only — not an appraisal, a lending decision, tax advice, legal advice, or brokerage advice. Terms, availability, and costs vary by lender, contract, and jurisdiction, and change over time. Confirm anything you intend to rely on with the provider and an appropriate professional.

HomeBase

Loading your page

Getting the information you requested ready to view.

You can still use the navigation above.

Equity & timing options, side by side

The routes people most often look at for: renovate or add space instead of moving.

Borrow against your equity

HELOC (home equity line of credit)

Mortgage lender

A revolving credit line secured by your home — draw what you need, when you need it.

The lender approves a credit limit based on your equity and credit. You draw against it during a set draw period, repay, and can draw again. You only owe on what you have actually drawn.

New monthly payment: Yes — a new payment once you draw, and it can rise when the draw period ends.
Rate structure: Usually variable, so the payment can change over time. Some lenders offer fixed-rate lock options on portions of the balance.
Claim on the home: Second lien behind your existing mortgage, unless you have no mortgage.
How it is repaid: Interest-only payments are common during the draw period, followed by a repayment period where principal is added. The balance is due in full when you sell.
When it comes due: At the end of the repayment period, or immediately on sale of the home.
Getting out early: Generally allowed, but closing the line early within the first few years can trigger a fee at some lenders.
Cost shape: Application, appraisal, and closing costs are common; some lenders waive them but add an early-closure fee. Annual fees exist at some lenders.

What it requires

Enough equity to satisfy the lender
Income and credit qualification
Usually opened before you list the home

Main risks

Your home secures the debt — missed payments can lead to foreclosure.
A variable rate means the payment can rise.
Lenders can freeze or reduce a line if home values or your credit change.
Carrying it while also holding a new mortgage means two obligations at once.

Official reference: CFPB — mortgages and home equity

Home equity loan (second mortgage)

Mortgage lender

A one-time lump sum secured by your home, repaid on a fixed schedule.

You borrow a set amount against your equity and receive it at closing. The loan amortizes over a fixed term alongside your existing first mortgage, which stays untouched.

New monthly payment: Yes — a predictable second payment starting immediately.
Rate structure: Usually fixed, so the payment does not change.
Claim on the home: Second lien behind your existing mortgage.
How it is repaid: Fixed monthly principal and interest from the first month. The remaining balance is due on sale.
When it comes due: End of the fixed term, or on sale of the home.
Getting out early: Usually allowed; check the note for any prepayment penalty.
Cost shape: Closing costs similar to a smaller mortgage — origination, appraisal, title.

What it requires

Enough equity
Income and credit qualification
A known amount — you cannot draw more later

Main risks

Your home secures the debt.
You pay interest on the full amount from day one, even if you needed it gradually.
Two payments if you also take a new mortgage.

Official reference: CFPB — mortgages and home equity

Cash-out refinance

Mortgage lender

Replace your current mortgage with a larger one and take the difference in cash.

A new first mortgage pays off the old one and returns the difference to you at closing. Your entire mortgage is repriced at the new rate — not just the cash you take out.

New monthly payment: Yes, and it replaces your old one — often larger, and at a different rate than the loan you gave up.
Rate structure: Whatever the new mortgage carries. This is the crux: if your existing rate is low, refinancing gives it up on the whole balance.
Claim on the home: First lien — it becomes your only mortgage.
How it is repaid: One monthly payment on the new, larger loan.
When it comes due: End of the new loan term, or on sale.
Getting out early: Usually allowed.
Cost shape: Full mortgage closing costs on the entire new loan amount.

What it requires

Enough equity after the cash-out
Full mortgage underwriting
Willingness to give up your current rate

Main risks

Losing a low existing rate across your whole balance is often the single largest cost, and it does not appear as a fee.
Resets the clock on how long you will be paying.
Your home secures everything.

Official reference: CFPB — mortgages and home equity

Finance a renovation

FHA 203(k) rehabilitation mortgage

Mortgage lender

A government-insured mortgage that finances the purchase or refinance plus the renovation in one loan.

The loan is based on the home’s value after the planned improvements. Renovation funds are held and released as work is completed, with required oversight of the work.

New monthly payment: Yes — a single mortgage payment.
Rate structure: Standard mortgage rate structure for the product, plus FHA mortgage insurance.
Claim on the home: First lien.
How it is repaid: One monthly mortgage payment covering both the home and the renovation.
When it comes due: Normal mortgage term.
Getting out early: Normal mortgage rules.
Cost shape: Mortgage closing costs, FHA mortgage insurance, plus fees tied to the renovation oversight and draws.

What it requires

An FHA-approved lender that actually does 203(k) — many do not
Contractors and a scope of work that meet the program’s requirements
Patience: draws, inspections, and paperwork take time

Main risks

The process is slower and more paperwork-heavy than a standard mortgage.
Work must follow the approved scope; changes are not simple.
Confirm current rules with the lender and the official source — program details change.

Official reference: HUD — 203(k) rehabilitation mortgage insurance

Fannie Mae HomeStyle Renovation

Mortgage lender

A conventional mortgage that finances renovation costs alongside the home.

Similar in shape to 203(k) but conventional rather than FHA-insured: the loan is underwritten against the post-renovation value, with renovation funds released as work progresses.

New monthly payment: Yes — a single mortgage payment.
Rate structure: Conventional mortgage terms; private mortgage insurance may apply depending on the down payment.
Claim on the home: First lien.
How it is repaid: One monthly mortgage payment.
When it comes due: Normal mortgage term.
Getting out early: Normal mortgage rules.
Cost shape: Mortgage closing costs plus renovation administration and inspection costs.

What it requires

A lender offering the product
Conventional credit qualification
An approved renovation scope and contractor

Main risks

Fewer lenders offer it than offer standard mortgages.
Renovation scope and contractor requirements constrain what you can do.
Confirm current eligibility and limits with the lender.

Official reference: Fannie Mae — HomeStyle Renovation

All of it in one table

Scroll sideways to compare. Terms vary by lender and by contract — these are the shapes, not quotes.

Equity and timing options compared by payment, rate structure, claim on the home, repayment, due date, early payoff, and cost shape
	HELOC (home equity line of credit)	Home equity loan (second mortgage)	Cash-out refinance	FHA 203(k) rehabilitation mortgage	Fannie Mae HomeStyle Renovation
What it is	A revolving credit line secured by your home — draw what you need, when you need it.	A one-time lump sum secured by your home, repaid on a fixed schedule.	Replace your current mortgage with a larger one and take the difference in cash.	A government-insured mortgage that finances the purchase or refinance plus the renovation in one loan.	A conventional mortgage that finances renovation costs alongside the home.
New monthly payment?	Yes — a new payment once you draw, and it can rise when the draw period ends.	Yes — a predictable second payment starting immediately.	Yes, and it replaces your old one — often larger, and at a different rate than the loan you gave up.	Yes — a single mortgage payment.	Yes — a single mortgage payment.
Rate structure	Usually variable, so the payment can change over time. Some lenders offer fixed-rate lock options on portions of the balance.	Usually fixed, so the payment does not change.	Whatever the new mortgage carries. This is the crux: if your existing rate is low, refinancing gives it up on the whole balance.	Standard mortgage rate structure for the product, plus FHA mortgage insurance.	Conventional mortgage terms; private mortgage insurance may apply depending on the down payment.
Claim on the home	Second lien behind your existing mortgage, unless you have no mortgage.	Second lien behind your existing mortgage.	First lien — it becomes your only mortgage.	First lien.	First lien.
How it is repaid	Interest-only payments are common during the draw period, followed by a repayment period where principal is added. The balance is due in full when you sell.	Fixed monthly principal and interest from the first month. The remaining balance is due on sale.	One monthly payment on the new, larger loan.	One monthly mortgage payment covering both the home and the renovation.	One monthly mortgage payment.
When it comes due	At the end of the repayment period, or immediately on sale of the home.	End of the fixed term, or on sale of the home.	End of the new loan term, or on sale.	Normal mortgage term.	Normal mortgage term.
Getting out early	Generally allowed, but closing the line early within the first few years can trigger a fee at some lenders.	Usually allowed; check the note for any prepayment penalty.	Usually allowed.	Normal mortgage rules.	Normal mortgage rules.
Cost shape	Application, appraisal, and closing costs are common; some lenders waive them but add an early-closure fee. Annual fees exist at some lenders.	Closing costs similar to a smaller mortgage — origination, appraisal, title.	Full mortgage closing costs on the entire new loan amount.	Mortgage closing costs, FHA mortgage insurance, plus fees tied to the renovation oversight and draws.	Mortgage closing costs plus renovation administration and inspection costs.

Who to ask about which

A lender — whether you qualify, whether their loan allows recasting, and how they treat expected rental income.

A HUD-certified counselor — free, and the right first call if the numbers are tight. Find one →

An attorney — before signing a shared-equity agreement, a rent-back, or any contract that is not a standard mortgage.

A tax professional — before converting a home to a rental or taking cash out.