Home Equity Loan vs. Refinance in Florida

For most Florida homeowners who want a set amount of cash and a predictable payment, a home equity loan is the cleaner choice because it leaves your existing first mortgage untouched and locks a fixed rate of about 7.0%-8.5%. A cash-out refinance, priced lower at roughly 6.5%-7.5%, makes more sense if you can replace your whole first mortgage at a rate at or below what you pay today and want a single loan. To borrow the same $97,000 over 15 years, the home equity loan runs about $913 a month while the cash-out refinance runs about $872 a month, before any change to the rest of your mortgage.

Home Equity Loan vs Cash-Out Refinance in Florida: 2026 Guide

The short answer: a home equity loan keeps your current mortgage in place and adds a fixed second loan, while a cash-out refinance replaces your whole first mortgage with a larger one. If you own a home in Florida and have built up equity, both let you borrow against the value of your property, but they are structured very differently, and the right pick depends on the mortgage you already have and how much certainty you want in your monthly payment.

Florida home values give many owners meaningful equity to work with. The median home value in the state is $325,000. (Source: U.S. Census ACS 2022, table DP04 (median home value)) Most lenders let you borrow against equity up to a combined loan-to-value of around 80%, so an owner of a median-priced, fully owned home could tap roughly the high-$90,000s in equity. That is the figure this guide uses throughout.

A home equity loan is a second loan that sits behind your current mortgage and pays out a fixed lump sum. A cash-out refinance is a brand-new, larger first mortgage that pays off your existing loan and hands you the difference in cash. Knowing how each works helps you avoid paying more than you need to. If you are weighing a line of credit instead of a lump sum, compare a HELOC in Florida as well, and you can always compare lenders before you commit.

At-a-Glance: Home Equity Loan vs Cash-Out Refinance Rates in Florida

How Home Equity Loan and Cash-Out Refinance Work in Florida

The structural difference between these two products is the single most important thing to understand before you borrow in Florida: one adds a second loan, the other replaces your first.

Home Equity Loan: a fixed second loan

A home equity loan is a separate, second mortgage. Your original first mortgage stays exactly as it is, with its current rate and balance unchanged. On top of it, you take out a new fixed-rate loan for a set amount, receive the full sum upfront, and repay it in equal monthly installments. In Florida these loans typically carry a fixed rate of about 7.0%-8.5%, so your payment never moves once the loan closes.

Cash-Out Refinance: a new, larger first mortgage

A cash-out refinance does not sit on top of your existing mortgage. It replaces your entire first mortgage with a new, bigger one. The new loan pays off the old balance, and you walk away with the difference in cash. Because you are restructuring your primary home loan, the new rate applies to the whole balance, not just the cash you pull out. Florida cash-out refinances commonly run a fixed rate of about 6.5%-7.5%.

That distinction drives everything else. With a home equity loan you keep the rate on your original mortgage, which matters a lot if you locked a low rate years ago. With a cash-out refinance, every dollar of your mortgage is repriced at today’s rate.

Home Equity Loan vs Cash-Out Refinance: A Real-Cost Comparison in Florida

On the cash you borrow, the cash-out refinance is the cheaper of the two by about $41 a month here, but the home equity loan can win overall once you account for the rest of your mortgage. To see why, assume a Florida homeowner wants to access $97,000 of equity and repay it over a 15-year horizon. We hold the borrowing amount and the time frame steady so the products are directly comparable.

With a home equity loan at a typical fixed rate of around 7.0%-8.5%, borrowing $97,000 runs about $913 a month, and you pay roughly $67,347 in total interest across the 15 years. Your existing first mortgage is untouched, so this is the only added cost.

With a cash-out refinance at a typical fixed rate of around 6.5%-7.5%, accessing the same $97,000 over the same 15-year horizon runs about $872 a month, with roughly $59,935 in total interest on that borrowed slice. On the cash you pull out, the refinance is the cheaper of the two, saving about $41 a month and a little over $7,400 in interest over the full term.

There is an important caveat with the refinance, though. Because a cash-out refinance replaces your entire first mortgage, its true cost depends on your existing loan. If your current mortgage carries a rate well below today’s 6.5%-7.5%, repricing the whole balance can wipe out the savings on the cash portion and cost you far more overall. The home equity loan figures above stand on their own because the rest of your mortgage is left alone. Both products here are fixed-rate, so neither payment changes after closing; if you were instead comparing a variable line of credit, that payment could rise or fall with the market.

When to Choose Home Equity Loan vs Cash-Out Refinance in Florida

Pick a home equity loan to protect a low existing rate, and a cash-out refinance only when today’s rate is at or below what you already pay. The numbers point to a clear set of borrower profiles in Florida.

Choose a home equity loan if

• You have a low rate on your existing first mortgage and do not want to give it up. This is the single biggest reason Florida owners pick a home equity loan today.
• You want a fixed payment of about $913 a month on $97,000 and value knowing the cost will never change.
• You need a specific lump sum for a defined project, such as a renovation or debt consolidation, rather than a flexible credit line. If a revolving line fits better, read up on a HELOC in Florida or a home equity loan in Florida.

Choose a cash-out refinance if

• Today’s rate is at or below the rate on your current mortgage, so repricing the whole balance does not hurt you.
• You prefer a single mortgage payment instead of two separate loans.
• The roughly $872 monthly cost on the cash portion, plus the lower 6.5%-7.5% rate, outweighs the closing costs of a full refinance.

Whichever direction you lean, get quotes from several lenders before deciding; you can compare lenders to see how rates and closing costs stack up in your area.

Florida-Specific Factors

In Florida the deciding factors are closing-cost taxes that scale with how much new mortgage debt you record, no state income tax, and federal lending protections that apply to both loans. Each can change which option is cheaper, so it pays to read the fine print before you sign.

Closing-cost taxes. Florida imposes no constitutional fee cap on home equity borrowing, but it does levy a documentary-stamp tax plus a non-recurring intangible tax on the mortgage that secures your loan, which raises closing costs. (Source: Florida revenue department / state statute) These taxes are charged on the amount of new debt recorded. That matters for the home equity loan versus refinance choice: a cash-out refinance records a much larger new mortgage than a second-position home equity loan does, so the stamp and intangible taxes on a full refinance are typically higher. On a median-priced $325,000 home, the gap between recording a small second loan and a much larger replacement first mortgage can be meaningful, so factor it into any comparison of the two.

No state income tax. Florida has no state income tax, so there is no state-level deduction or penalty tied to either loan. At the federal level, the IRS allows you to deduct the interest only when the money is used to buy, build, or substantially improve the home that secures the loan, within the $750,000 acquisition-debt cap. (Source: IRS Publication 936 (home-mortgage interest deduction)) Cash used to consolidate debt or cover other expenses generally is not deductible, regardless of which product you choose.

Federal protections. Both products are governed by federal Truth in Lending rules, which require lenders to disclose your rate and total cost upfront and give you a right to cancel certain home loans within three business days. (Source: 12 CFR Part 1026 (Regulation Z) / Truth in Lending Act)

Regulator. State-chartered lenders operating in Florida are overseen by the Florida Office of Financial Regulation, which is the agency to contact if you have a complaint or want to confirm that a lender is properly licensed before you apply.

Home Equity Loan vs Cash-Out Refinance: Pros and Cons

In short, the home equity loan protects your existing rate at a higher cost on the cash, while the refinance lowers the rate on the cash but reprices your whole mortgage.

Home Equity Loan

• Pros: Leaves your existing first mortgage and its rate untouched; fixed rate around 7.0%-8.5% means a steady payment; smaller new mortgage recorded, so lower Florida stamp and intangible taxes.
• Cons: Rate is usually higher than a refinance; you carry two monthly mortgage payments; the lump-sum structure offers no flexibility once funded.

Cash-Out Refinance

• Pros: Lower rate of about 6.5%-7.5% on the cash you borrow; one consolidated mortgage payment; about $872 a month on $97,000 versus $913 for the home equity loan.
• Cons: Replaces your entire first mortgage, so a low existing rate gets repriced; larger recorded mortgage means higher Florida closing taxes; full refinance closing costs can be steep.

Finding Home Equity Loan and Cash-Out Refinance Lenders in Florida

Shop both products at national banks, regional banks, local credit unions, and online lenders, then verify each one against the Florida Office of Financial Regulation. Each channel has trade-offs: credit unions often offer lower rates and fees to members, banks bundle these loans with existing accounts, and online lenders compete on speed and transparency.

However you shop, vet every lender the same way:

• Confirm the lender is licensed to operate in Florida, which you can verify through the Florida Office of Financial Regulation.
• Ask for the full rate, the APR, and an itemized list of closing costs in writing, including the Florida documentary-stamp and intangible taxes.
• Compare offers on the same loan amount and term so the numbers are apples to apples.
• For a refinance, ask specifically how repricing your whole first mortgage changes your total cost, not just the rate on the cash portion.

Collect at least three written quotes before deciding. A small difference in rate or closing costs adds up over a 15-year repayment.

Common Mistakes to Avoid

The costliest errors are repricing a low-rate mortgage needlessly and overlooking Florida’s recording taxes.

• Refinancing a low-rate first mortgage just to pull cash, which can cost far more once the whole balance is repriced.
• Comparing only the monthly payment and ignoring total interest over the full 15 years.
• Forgetting to budget for Florida’s documentary-stamp and non-recurring intangible taxes on the recorded mortgage.
• Assuming the interest is tax-deductible when the cash is not used to buy, build, or improve the home.
• Taking the first offer instead of comparing several lenders.

Compare Home Equity Loan and Cash-Out Refinance Rates in Florida

Ready to see real numbers for your home? Compare current home equity loan and cash-out refinance offers from Florida lenders side by side, and check the total cost over the full term before you choose. Compare lenders to get started.

Florida-specific notes

• Median home value: $325,000, a baseline for estimating available equity (at an 80% combined LTV cap). (Source: U.S. Census ACS 2022, DP04)
• State HELOC rule: Florida imposes no constitutional fee cap, but documentary-stamp tax and a non-recurring intangible tax apply to the mortgage securing a HELOC, raising closing costs. (Source: Florida state statute)
• Closing-cost note: Florida levies a documentary-stamp tax plus non-recurring intangible tax on the mortgage, which raises HELOC closing costs. (Source: Florida Department of Revenue)
• Rate spread: variable HELOC APR (8.2% – 9.8% variable) versus home equity loan APR (6.5% – 7.5% fixed) for Florida, per the comparison table above.
• State regulator: Florida Office of Financial Regulation.