Florida HELOC vs Home Equity Loan vs Cash-Out Refinance Calculator

How this calculator works

A Florida homeowner with equity to tap has three structural choices, and they are not equivalent. A HELOC is a revolving second-lien credit line at a variable rate, interest-only during the draw period. A home equity loan is a fixed-rate, fixed-term second mortgage — a lump-sum loan with predictable payments. A cash-out refinance is a wholesale replacement of the existing first mortgage with a larger one, with the difference delivered as cash. Each route prices differently. Each carries a different Florida statutory closing-cost profile. And on a typical 2026 borrower with a low-rate existing first mortgage, the math diverges sharply.

This calculator models all three side-by-side on the same draw amount and the same Florida home, then surfaces:

1. Maximum line available under the Florida-typical 85% combined-LTV cap (home value times 0.85 minus the existing first mortgage balance).
2. Monthly payment for each option — HELOC interest-only during the 10-year draw period, home equity loan fully amortizing over the chosen term, cash-out refi P&I on the new first mortgage.
3. Florida statutory closing costs for each option — mortgage doc stamps under F.S. § 201.08 at $0.35 per $100 of lien, and non-recurring intangible tax under F.S. § 199.133 at 2 mills per dollar (or $2 per $1,000). Plus the Florida-typical non-statutory closing-cost ranges: $300-$800 for a HELOC, $1,500-$3,000 for a HE loan, $5,000-$8,000 for a cash-out refi.
4. 10-year total cost of each option (120 months of payments plus closing costs, with the cash-out refi reported as marginal cost relative to keeping the existing first mortgage).
5. Recommendation — the lowest 10-year-cost option, with a tie-break toward use-case fit.
6. IRS Pub 936 / TCJA 2017 deductibility check on the stated use of funds.

The Florida intangible-tax wrinkle on HELOCs

Florida is one of the few states that imposes a non-recurring tax at the recording of a mortgage instrument. Two pieces:

• Mortgage documentary stamps (F.S. § 201.08) — $0.35 per $100 of the face amount of the promissory note, paid to the county clerk at recording.
• Non-recurring intangible tax (F.S. § 199.133) — 2 mills per dollar of the mortgage face amount, or $2 per $1,000, also paid at recording.

For a fixed-rate home equity loan or a cash-out refinance, the math is unambiguous: stamps and intangible attach to the loan face amount at recording. For a HELOC, the math has a structural ambiguity that matters at closing.

A HELOC is a revolving credit line: the borrower can draw up to a maximum line amount, repay, and re-draw, all secured by a single recorded second-lien mortgage. The question is whether stamps and intangible attach (a) to the maximum line at the original recording or (b) incrementally to each draw above prior maximums. Both treatments have been seen in Florida practice.

The conservative planning assumption — and the one most Florida lenders use on the Loan Estimate — is that the full Florida statutory tax applies to the maximum line amount at closing. A $100,000 HELOC line drawn only $30,000 against still incurs $350 in stamps plus $200 in intangible at closing, computed on the $100,000 line maximum. Some Florida lenders structure HELOCs using a Future Advance Clause to defer the intangible tax to draw events that exceed prior maximums. Recent Florida Department of Revenue Technical Assistance Advisements have varied on the treatment, and the structure ultimately depends on the specific HELOC note and security instrument language.

Practical implication: ask the lender on the Loan Estimate which treatment they use. The difference on a $100,000 line drawn $30,000 is roughly $385 of tax — meaningful relative to the $300-$800 non-statutory closing-cost stack on a Florida HELOC. This calculator models the conservative case (taxes on the requested draw amount, treating the line size as equal to the draw).

The three-option comparison framing

The three options answer different shapes of cash need. The economics differ accordingly.

A HELOC fits a use case where the timing or amount of the draw is uncertain — college tuition paid across four years, a home-improvement project where the total cost is unclear, a cash reserve held in case of medical or job-loss emergency. The borrower pays nothing on the line until they draw against it, and only interest on the drawn balance during the 10-year draw period under 12 CFR Part 1026 (Regulation Z). The closing-cost profile is the lowest of the three options: typically $300-$800 in non-statutory costs, with some Florida lenders waiving even this for relationship customers.

A home equity loan fits a use case where the amount is known and the borrower wants payment certainty — a debt consolidation, a single-project renovation with a contractor estimate, a major one-time purchase. The borrower receives the full loan amount at closing, with a fixed monthly P&I payment over a fixed term (typically 10-20 years). The closing-cost profile is materially heavier than a HELOC because the lender is originating a fully-underwritten fixed-rate product: Florida-typical $1,500-$3,000 in non-statutory closing costs, with the same statutory stamps and intangible as the HELOC on the second-lien face.

A cash-out refinance fits a use case where the existing first mortgage is at a high rate (so the rate-and-term improvement justifies repricing the entire balance) or where the draw amount is large enough to exceed the second-lien combined-LTV cap. The trade-off is severe in two dimensions: first, the Florida statutory tax attaches to the FULL new first mortgage amount, not just the cashed-out portion; second, the non-statutory closing costs run $5,000-$8,000 because the lender is originating a full first-mortgage product (appraisal, title insurance, escrow setup, lender origination). And critically, the cash-out refi reprices the entire existing first-mortgage balance at the new rate. For a 2026 borrower who locked at 3-4% in 2020-2021, refinancing into a 7% cash-out rate means paying 3-4 percentage points more on the entire existing balance just to access incremental cash. Almost always, the math says no.

A worked example: $500K home, $200K first mortgage at 4%, $50K draw

A Florida homeowner has a $500,000 home with a $200,000 outstanding first mortgage at 4.0% / 30 years, current monthly P&I of $954.83. They need $50,000 for a home renovation. They are quoted: HELOC at 9.0% variable, home equity loan at 8.5% fixed / 15 years, cash-out refi at 7.0% / 30 years.

Maximum line available:

• $500,000 times 0.85 minus $200,000 = $225,000 combined-LTV envelope.
• The $50,000 draw fits comfortably inside.

HELOC option (variable rate, interest-only during draw):

• Monthly payment (interest-only on $50,000 at 9.0%): $50,000 times 0.09 divided by 12 = $375.00/month
• Florida mortgage stamps (F.S. § 201.08): $50,000 / 100 times $0.35 = $175
• Florida intangible tax (F.S. § 199.133): $50,000 times 0.002 = $100
• Non-statutory closing costs (Florida-typical): $500
• Total HELOC closing costs: $775
• 10-year total cost: ($375 times 120) plus $775 = $45,775

Home equity loan option (fixed rate, 15 years):

• Monthly payment ($50,000 at 8.5% / 15y, fully amortizing): $492.37/month
• Florida mortgage stamps: $175
• Florida intangible tax: $100
• Non-statutory closing costs (Florida-typical): $2,000
• Total HE loan closing costs: $2,275
• 10-year total cost: ($492.37 times 120) plus $2,275 = $61,359

Cash-out refinance option (new $250K first lien at 7.0% / 30 years):

• New monthly P&I on $250,000 at 7.0% / 30y: $1,663.26/month
• Old first mortgage P&I (replaced): $954.83/month
• Marginal monthly cost: $1,663.26 minus $954.83 = $708.43/month more
• Florida mortgage stamps on the FULL $250,000 new first lien: $250,000 / 100 times $0.35 = $875
• Florida intangible tax on the FULL $250,000 new first lien: $250,000 times 0.002 = $500
• Non-statutory closing costs (Florida-typical): $6,000
• Total cash-out closing costs: $7,375
• 10-year marginal cost: ($708.43 times 120) plus $7,375 = $92,386

Recommendation: HELOC. Lowest 10-year cost by a wide margin ($45,775 vs $61,359 vs $92,386), lowest monthly payment, lowest closing-cost outlay at recording. The cash-out refi math is dramatically worse because the existing first mortgage at 4.0% gets repriced to 7.0% on the entire $200,000 balance — that single repricing burns roughly $500/month in extra interest cost just to access $50,000 of cash. Even though the cash-out refi rate (7.0%) is the lowest of the three rates quoted, applying it to the existing low-rate balance destroys the economics.

The home equity loan is the second-best option here and is the right answer for a borrower who specifically wants payment certainty (a 15-year fixed P&I of $492.37 that cannot drift up with prime). The HELOC's $375 interest-only payment is the lowest cash outlay during the draw period, but it does not amortize principal — at the end of the 10-year draw period, the borrower still owes the $50,000 principal and faces a repayment-period payment shock when the balance starts amortizing. The HELOC is the answer when the borrower expects to repay opportunistically within the draw period; the HE loan is the answer when the borrower wants disciplined amortization.

The Florida statutory tax differential in plain numbers

The single largest reason a Florida borrower with a low-rate first mortgage should default away from a cash-out refi is the Florida statutory tax math. On a $50,000 draw:

• HELOC sized to $50,000: stamps $175 + intangible $100 = $275 of Florida tax
• HE loan for $50,000: stamps $175 + intangible $100 = $275 of Florida tax
• Cash-out refi adding $50,000 to a $200,000 existing balance: stamps on $250,000 = $875; intangible on $250,000 = $500; total = $1,375 of Florida tax

Five times the Florida statutory cost of the equivalent second-lien product, for the same $50,000 of cash. And the closing-cost differential is even worse when the non-statutory line items are layered on top: $500 (HELOC) vs $2,000 (HE loan) vs $6,000 (cash-out refi). That is a $5,500 floor differential between the HELOC option and the cash-out refi option, before any monthly-payment math.

When does cash-out refi actually win in Florida?

Three scenarios:

1. Existing first mortgage rate is meaningfully higher than current refi rates. A borrower whose existing 30-year fixed is at 8.5% — common for borrowers who closed in late 2023 — refinancing into a 7.0% cash-out refi captures 150 basis points of rate savings on the entire balance. Over 30 years on a $200,000 balance, that is enough to offset the additional Florida statutory tax and non-statutory closing costs. The math has to be computed; the calculator above does it.

2. Draw amount exceeds the 85% combined-LTV envelope. A borrower with a $400,000 home, a $300,000 first mortgage, and a $100,000 cash need cannot fit the draw inside the second-lien envelope ($400,000 times 0.85 minus $300,000 equals $40,000 of available headroom). A cash-out refi that re-underwrites the first lien at 80% LTV on the new total ($320,000 on $400,000 home) is the only way to access the full $100,000.

3. Underwriting constrained to a fully-amortizing 30-year payment. A borrower whose debt-to-income ratio is tight may not qualify for a HELOC or HE loan if the lender underwrites the fully-amortizing repayment-period HELOC payment (Florida HELOCs require the lender under Reg Z to disclose the payment-shock scenario at draw-period end). A cash-out refi at a 30-year amortization spreads the payment over a longer horizon and can keep the DTI inside underwriting limits.

In all three cases, run both numbers — the Florida statutory tax differential is meaningful, and a national mortgage calculator that ignores it will mis-rank the options.

IRS Pub 936 and TCJA 2017: when is the interest deductible?

Federal: under IRS Publication 936 as modified by TCJA 2017 § 11043, HELOC and home equity loan interest is deductible only when the loan proceeds are used to buy, build, or substantially improve the home that secures the loan. Debt consolidation, college tuition, vacations, and general cash reserves are NOT deductible from tax year 2018 through 2025; the TCJA limitation sunsets at year-end 2025, and the post-2025 framework will depend on subsequent legislation.

A cash-out refinance follows the same use-of-funds rule on the cashed-out portion. The refinance of the existing acquisition-debt portion continues to deduct under the standard mortgage-interest rules (subject to the $750,000 acquisition-debt cap for loans originated after Dec 15, 2017).

State: Florida has no state income tax, so the federal deduction is the only deduction at stake. There is no Florida state-level HELOC interest deduction question.

Practical implication: if you are using the HELOC or HE loan for home improvement and plan to claim the deduction, document the use of funds carefully. Pay contractors directly from the HELOC / HE loan account where possible; keep contractor invoices, lien releases, and proof of payment. An IRS auditor wants to see a clean tracing from loan proceeds to home-improvement spending. Co-mingling proceeds with general checking-account funds and then paying contractors from the mixed account is the most common way the deduction gets disallowed on audit.

What this calculator does NOT do

This is a Florida-anchored decision-comparison estimator. It does not:

• Stress-test HELOC rate variability. HELOC rates float with prime; the rate at quote is not the rate over the full 10-year draw period. Rerun the calculator with the HELOC rate increased by 2-3 percentage points to see the rate-shock scenario.
• Model the HELOC repayment period. We model the 10-year interest-only draw period. The post-draw 15- or 20-year repayment-period payment will be materially higher (the balance amortizes from the draw-period-end balance at the then-prevailing variable rate). Reg Z requires the lender to surface the payment-shock scenario in the HELOC early disclosure; read that document.
• Compute discount-point buy-downs. Some Florida HE loan and cash-out refi lenders quote a lower rate with discount points (typically 1 point equals 1% of loan, lowering the rate by roughly 0.25%). We use the all-in rate as quoted.
• Model PMI on a cash-out refi above 80% LTV. We cap the cash-out at the 85% combined-LTV envelope but do not add a PMI premium for the 80-85% LTV band; in practice, a cash-out refi above 80% LTV will carry PMI of $50-$200 per month.
• Produce IRS Pub 936 tracing documentation. We surface the deductibility question and the use-of-funds rule, but we do not generate the audit-ready paperwork.
• Substitute for the lender's Loan Estimate or HELOC early disclosure. For binding numbers — including the lender's specific Florida intangible-tax structure on a HELOC, point buy-down options, and exact non-statutory closing-cost line items — pull the Loan Estimate (HE loan / cash-out refi) or HELOC early disclosure (12 CFR Part 1026).
• Substitute for a Florida-licensed mortgage broker, CPA, or financial planner. For the loan-product decision, consult a Florida-licensed mortgage broker. For the deductibility analysis, consult a Florida-licensed CPA. For the broader financial-planning question of whether to tap home equity at all, consult a fiduciary financial planner.

How this page is maintained

The two Florida statutory rates surfaced here — F.S. § 201.08 mortgage stamps at $0.35/$100 and F.S. § 199.133 intangible tax at 2 mills — have been stable across recent Florida legislative sessions. The HELOC and HE loan rate defaults reflect Florida-typical 2026 market quotes and shift with the prime rate and broader rate environment. The TCJA 2017 § 11043 home-equity interest deduction limitation sunsets at year-end 2025; we will refresh the IRS Pub 936 framing if subsequent legislation extends, modifies, or lapses the limitation.

Last reviewed: 2026-05-15 against F.S. § 201.08, § 199.133, IRS Publication 936, TCJA 2017 § 11043, and 12 CFR Part 1026 (Regulation Z).