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How to get equity out of your home without refinancing
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Quick Answer: You may be able to access home equity without refinancing through a home equity loan, HELOC, reverse mortgage, second reverse mortgage, or sale-leaseback agreement, based on your financial goals and situation.
Key Points
Home equity loans and HELOCs allow you to borrow against your home while keeping your mortgage, but they typically require monthly payments and use your home as collateral.
Reverse mortgages, second reverse mortgages, and sale-leaseback agreements offer additional ways to access equity, each with different repayment terms, ownership considerations, and eligibility requirements.
Which approach makes sense depends on factors such as your available equity, how much money you need, your ability to manage payments, and your long-term plans.
If you landed a low interest rate on your mortgage, it’s understandable you’d want to keep it. And if you’ve been paying off your mortgage for years, you likely don’t want to start over with a new loan term, either.
These are just two examples of situations where refinancing might not be the best fit—especially if it could lead to higher monthly mortgage payments.
No matter why you’re looking for funds—whether it’s for home improvements, unexpected expenses, or controlling higher-interest debt—you may be able to access your home equity while keeping your existing mortgage in place.
This article walks you through multiple home equity options so you can make an informed decision.
5 ways to access home equity without refinancing
Home equity is the difference between your home’s current market value and the amount you owe on your mortgage. There are multiple ways to access that equity without refinancing, each with its own requirements, costs, and tradeoffs.
Below are five common ways homeowners may be able to access home equity without refinancing.
1. Home equity loan1
According to the Consumer Financial Protection Bureau (CFPB), a home equity loan may allow you to borrow money using the equity in your home as collateral—without replacing your existing mortgage. It provides a lump sum upfront that is repaid over time through set monthly payments, typically with a fixed interest rate.
One advantage of a home equity loan is predictability—fixed payments may make it easier to budget over time. This structure works well for expenses with a known cost, such as home improvements or paying down higher-interest debt. Because the loan is secured by your home, failing to meet repayment terms may put your property at risk. It also adds a second monthly payment alongside your existing mortgage.
A home equity loan may be a good fit for homeowners who need a specific amount of funds upfront and prefer consistent monthly payments over time.
Home equity loans tend to offer lower interest rates than unsecured borrowing options, depending on the product and borrower profile.
2. Home equity line of credit (HELOC)
A home equity line of credit (HELOC) is a revolving line of credit that may allow you to borrow against your home equity to access cash as needed, similar to a credit card. It does not replace your existing mortgage, but instead functions as a separate loan secured by your home.
HELOCs typically include a draw period, during which you may access funds as needed, followed by a repayment period when principal and interest payments are required. The flexibility to borrow, repay, and borrow again may be helpful for ongoing or unpredictable expenses. However, HELOCs generally require monthly loan payments, and variable interest rates may cause monthly payment amounts to change over time.
This type of equity line of credit may be a good fit for homeowners who want flexible access to funds over time and are comfortable managing a revolving balance with changing payment amounts. In some cases, HELOCs may offer lower upfront costs, which may make them a suitable option for some homeowners, depending on their needs and financial situation.
The CFPB provides additional information about how home equity loans compare to home equity lines of credit.
3. Reverse mortgage
A reverse mortgage may allow older homeowners to access a portion of their home equity without required monthly mortgage payments. Borrowers must continue to meet ongoing loan obligations, as outlined by the U.S. Department of Housing and Urban Development (HUD). Instead of paying the lender each month, the loan balance increases over time as interest accrues.2
The loan becomes due when the borrower sells the home, moves out permanently, or passes away, and the balance may reduce the amount of equity remaining over time. Funds may be received as a lump sum, line of credit, or monthly payments, depending on available reverse mortgage options.
A reverse mortgage may be a good fit for homeowners who plan to remain in their home long term and want to access equity without taking on a required monthly mortgage payment, while continuing to meet obligations such as paying property taxes, maintaining homeowners insurance, and keeping the home in good condition.
→ To learn more, see our guide, What is a reverse mortgage and how does it work?
The borrower must meet all loan obligations, including living in the property as the principal residence and paying property charges, including property taxes, fees, and hazard insurance. The borrower must maintain the home. If the homeowner does not meet these loan obligations, then the loan will need to be repaid.
4. Second reverse mortgage
A second reverse mortgage, such as HomeSafe Second, allows eligible homeowners to access a portion of their home equity while keeping their existing mortgage in place. Unlike a traditional reverse mortgage that replaces your current loan (or is taken out on a paid-off house), this option is structured as a second lien on the home.
With HomeSafe Second, borrowers are not required to make monthly mortgage payments on the reverse mortgage, as long as they continue to meet all loan obligations, including making payments on the first lien mortgage, as well as paying property taxes, maintaining homeowners insurance, and keeping the home in good condition.
Second reverse mortgages may be a good fit for homeowners who want to access equity without refinancing their primary mortgage or taking on additional required monthly mortgage payments, while continuing to meet loan obligations.
The borrower must meet all loan obligations, including living in the property as the principal residence and paying property charges, including property taxes, fees, and hazard insurance. The borrower must maintain the home. If the homeowner does not meet these loan obligations, then the loan will need to be repaid.
5. Sale-leaseback agreement1
A sale-leaseback agreement involves selling your home to a company or investor and then renting it back, allowing you to access your home equity while continuing to live in the property. After the sale, you become a renter and no longer own the home.
One advantage of a sale-leaseback agreement is that it may provide access to a large amount of cash without a loan. However, you will still have to make ongoing rent payments, which may increase over time depending on the terms of the agreement, and you may have less control over the property.
A sale-leaseback agreement may be a good fit for homeowners who want to access a significant portion of their home equity and are comfortable transitioning from ownership to renting while remaining in the home.
Comparing your home equity options
Each option has different costs, repayment structures, and long-term implications. These options generally fall into three categories: lump-sum loans, flexible lines of credit, and options that do not require monthly mortgage payments. The option you consider may depend on your financial goals, cash flow needs, and overall plans.
When comparing these options, it may help to look at how each one works:
- Home equity loan: Provides a lump sum with fixed monthly payments and typically a fixed interest rate, which may offer predictable repayment over a set term.¹
- HELOC: Offers a revolving line of credit that often has a variable interest rate, with payments that may change over time.
- Reverse mortgage: Enables you to access home equity without required monthly mortgage payments as long as ongoing loan obligations are met, with repayment due when certain conditions are triggered, such as when the borrower moves out of the home or passes away.
- Second reverse mortgage (HomeSafe Second): Lets you access home equity while keeping your existing mortgage in place, without required monthly mortgage payments on the second lien, as long as you continue to meet all loan obligations, including those related to the first lien mortgage.
- Sale-leaseback agreement: Involves selling your home and renting it back, allowing you to access home equity without taking on a loan.1
Understanding these differences may help you evaluate which approach aligns best with your financial situation and housing goals.
The borrower must meet all loan obligations, including living in the property as the principal residence and paying property charges, including property taxes, fees, and hazard insurance. The borrower must maintain the home. If the homeowner does not meet these loan obligations, then the loan will need to be repaid.
To learn more, please visit the CFPB’s “Reverse Mortgage: A Discussion Guide.”
The table below offers a side-by-side comparison:
| Option | How funds are received | Monthly payments | Interest rate type | Ownership impact | When it’s repaid |
| Home equity loan¹ | Lump sum | Required (fixed) | Typically fixed | You retain ownership | Repaid over a set term |
| HELOC | As needed (revolving line of credit) | Required (may vary) | Often variable | You retain ownership | Repaid during repayment period |
| Reverse mortgage (first lien) | Lump sum, line of credit, or monthly payments | No monthly mortgage payment* | Typically fixed or variable | You retain ownership | Due when borrower moves, sells, passes away, or doesn’t comply with loan terms |
| HomeSafe Second (second reverse mortgage) | Lump sum | Not required on the second lien** | Typically fixed | You retain ownership | Due when borrower moves, sells, passes away, or doesn’t comply with loan terms |
| Sale-leaseback agreement1 | Lump sum from home sale | Rent payments required | Not applicable | You no longer own the home | No loan repayment (home is sold) |
*The borrower must meet all loan obligations, including living in the property as the principal residence and paying property charges, including property taxes, fees, and hazard insurance. The borrower must maintain the home. If the homeowner does not meet these loan obligations, then the loan will need to be repaid.
**The borrower must meet all loan obligations, including meeting those under the first lien mortgage, living in the property as the principal residence and paying property charges, including property taxes, fees, hazard insurance. The borrower must maintain the home. If the homeowner does not meet these loan obligations, then the loan will need to be repaid.
Is it a good idea to take equity out of a house?
Accessing home equity involves tradeoffs that could affect your long-term financial position. Whether it makes sense depends on your individual goals and comfort with the risks involved.
In addition, using home equity for non-essential spending may increase the risk of taking on unnecessary debt, especially if there is no clear repayment plan.
Before moving forward, consider:
- Do I have a clear need for the funds, and how much cash do I actually need?
- Can I comfortably afford any required monthly payments?
- Am I confident in the stability of my local housing market?
- Do I have a plan for repayment or exiting the agreement?
- Am I comfortable reducing my home’s equity and potentially limiting future borrowing options?
Carefully considering these questions may help you determine whether accessing your home equity aligns with your financial goals. Having a clear plan for how the funds will be used and repaid may also help reduce financial risk.
Consider the following hypothetical example:
Kristina is 68 and recently retired. She has nearly paid off her mortgage and built substantial equity over the years, but her monthly income is more limited than it was before retirement. When an unexpected home repair and rising living costs begin to make her budget feel tight, she starts looking into ways to access her home equity.
At first, Kristina considers refinancing, but she decides against it because she wants to avoid replacing her existing mortgage. She then looks into alternatives such as a HELOC and a home equity loan, but she doesn’t want a new monthly obligation. Then, she considers a second-lien reverse mortgage, such as HomeSafe Second. This option could allow her to access home equity without replacing her existing mortgage or taking on required monthly mortgage payments, as long as loan obligations are met.
Staying in the home she knows and loves is her biggest priority, so after comparing her options, she decides a reverse mortgage or a second reverse mortgage may align best with her goals.
This decision reflects how individual priorities—such as cash flow needs and how long a borrower plans to remain in their home—may shape which option may be appropriate.
The borrower must meet all loan obligations, including living in the property as the principal residence and paying property charges, including property taxes, fees, and hazard insurance. The borrower must maintain the home. If the homeowner does not meet these loan obligations, then the loan will need to be repaid.
How to choose the right way to access your home equity
Each option comes with different eligibility requirements, costs, and long-term considerations. Factors such as credit score, income, and available equity may affect which products are available to you.
When comparing your options, it may help to consider:
- Can you afford any required monthly payments? Some options, such as home equity loans and HELOCs, require ongoing payments, while others may not.
- Do you meet the eligibility requirements? Lenders may evaluate factors such as credit history, income, and available equity when determining eligibility.
- What are your long-term plans for your home equity? Accessing equity now may reduce what is available later or affect future borrowing options.
- How long do you plan to stay in your home? Some options may be more suitable for homeowners planning to stay in their homes long term. Closing costs and fees may also impact how long it takes for an option to make financial sense.
- What do you need the funds for? A one-time expense may call for a different solution than ongoing or unpredictable costs.
- How much equity do you have? Understanding your current equity may help you estimate how much you may be able to access. (Most lenders limit total borrowing to about 80% to 85% of a home’s value, including your existing mortgage.)
Comparing these options in the following table may help clarify which approach best fits your needs.
| Consideration | Home equity loan¹ | HELOC | Reverse mortgage (first lien) | HomeSafe Second (second reverse mortgage)* |
| Monthly payments | Required (fixed) | Required (may vary) | No monthly mortgage payment (if obligations are not met then the full amount is due)** | No monthly mortgage payment on the second lien (if obligations are not met then the full amount is due)*** |
| Eligibility requirements | Credit, income, and equity | Credit, income, and equity | Age (62+), equity, financial assessment | Age (55+, minimum age limits vary by state for second lien product), equity, financial assessment*** |
| Long-term impact on equity | Reduces equity over time | Reduces equity as funds are used | Balance grows over time | Balance grows over time |
| Time in home | May suit longer-term homeowners | May suit flexible timelines | Often suited for long-term homeowners | Often suited for long-term homeowners who want to keep their existing mortgage |
| Best for type of expense | One-time, known costs | Ongoing or unpredictable expenses | Supplemental income or cash flow needs | Accessing equity without refinancing an existing mortgage |
| Available equity needed | Typically requires sufficient equity | Typically requires sufficient equity | Based on age, home value, and equity | Based on age, home value, and equity, and existing mortgage balance |
*HomeSafe Second is not available in all states.
**The borrower must meet all loan obligations, including living in the property as the principal residence and paying property charges, including property taxes, fees, and hazard insurance. The borrower must maintain the home. If the homeowner does not meet these loan obligations, then the loan will need to be repaid.
***The borrower must meet all loan obligations, including meeting those under the first lien mortgage, living in the property as the principal residence and paying property charges, including property taxes, fees, hazard insurance. The borrower must maintain the home. If the homeowner does not meet these loan obligations, then the loan will need to be repaid.
→Learn more about loan options in our guide, HELOC alternatives: 7 ways to access cash.
Risks of accessing home equity
Accessing your home equity may provide financial flexibility, but it also involves risks to consider before moving forward. They include the following.
- Risk of foreclosure: Your home is used as collateral, so failing to meet repayment terms may result in foreclosure.
- Reduced home equity: Borrowing against your home reduces your available equity and may limit future borrowing options or the amount you can leave to heirs.
- Variable payments: Some options, such as HELOCs, may have interest rates that fluctuate over time, which could lead to higher or lower monthly payments.
- Repayment risk: Not having a clear plan for how the loan will be repaid may increase the risk of financial strain or other issues.
Final thoughts on home equity options
Accessing your home equity without refinancing may offer flexibility for eligible homeowners who want to tap into their home’s value while keeping their existing mortgage in place. Options such as home equity loans1, HELOCs, reverse mortgages, second reverse mortgages, and sale-leaseback agreements1 each come with different structures, requirements, and tradeoffs.
The right approach depends on your financial goals, how you plan to use the funds, and your comfort with the responsibilities involved. Comparing options, understanding the costs, and evaluating how each choice may affect your long-term plans may help you make a more informed decision about how to get equity out of your home.
If you’re considering whether a reverse mortgage or a second reverse mortgage may be a good fit, try our reverse mortgage calculator to estimate how much you may be able to access based on your home value and age.
FAQs about your home equity options
Can you take out home equity without refinancing?
Yes. Options such as home equity loans, HELOCs, reverse mortgages (including second-lien reverse mortgages like HomeSafe Second), and sale-leaseback agreements allow you to access home equity without replacing your existing mortgage.
What can you use home equity for?
Home equity may be used for a variety of expenses, including home improvements, medical bills, everyday living costs, or paying down higher-interest debt. How funds are used depends on your goals and financial situation.
How much equity do you need to access your home equity?
Most lenders require homeowners to retain about 15% to 20% equity after borrowing. The exact amount depends on your home’s value, mortgage balance, and lender guidelines. Some lenders may also have options for borrowers with lower credit scores, depending on the product.
Does accessing home equity affect your mortgage?
It depends on the loan type. Home equity loans and HELOCs do not replace your existing mortgage—they add a separate loan. Reverse mortgages and second reverse mortgages do not require monthly mortgage payments as long as loan obligations are met, but they change how and when the loan is repaid. A sale-leaseback agreement is not a loan—you sell your home and lease it back, so you no longer own the property.1
The borrower must meet all loan obligations, including living in the property as the principal residence and paying property charges, including property taxes, fees, and hazard insurance. The borrower must maintain the home. If the homeowner does not meet these loan obligations, then the loan will need to be repaid.
Do you have to make monthly payments on home equity options?
Some options, such as home equity loans and HELOCs, require monthly payments. Others, like reverse mortgages and second reverse mortgages, do not require monthly mortgage payments as long as loan obligations are met.
The borrower must meet all loan obligations, including living in the property as the principal residence and paying property charges, including property taxes, fees, and hazard insurance. The borrower must maintain the home. If the homeowner does not meet these loan obligations, then the loan will need to be repaid.
How long does it take to access home equity?
Timing varies by product and lender. Home equity loans and HELOCs may take several weeks to process, while other options may have different timelines depending on underwriting and closing requirements.
Which is better: a refinance or a home equity loan?
A home equity loan may be better if you want to keep your existing mortgage, while a refinance may make more sense if you want to change your interest rate or loan terms. The right option depends on your goals, rates, and cash needs.
Is a reverse mortgage better than a HELOC?
It depends on your situation. A reverse mortgage does not require monthly mortgage payments, while a HELOC typically does. A HELOC may offer more flexibility, while a reverse mortgage may suit those seeking to reduce monthly payment obligations.
The borrower must meet all loan obligations, including living in the property as the principal residence and paying property charges, including property taxes, fees, and hazard insurance. The borrower must maintain the home. If the homeowner does not meet these loan obligations, then the loan will need to be repaid.
Does accessing home equity affect your credit?
Accessing home equity may affect your credit depending on the option and how the account is managed. Applying for a loan may result in a credit inquiry, and missed payments could negatively impact your credit over time.
What are the risks of using home equity?
Using home equity involves risks, including the potential for foreclosure if you do not meet loan terms, since your home is used as collateral. Borrowing also reduces your available equity and may affect future financial flexibility.
Disclaimers
1Finance of America does not currently offer home equity loans or home equity lines of credit.
2These materials were not provided by HUD or FHA and were not approved by FHA or any government agency.
About the author
Lisa Lacy
Lisa Lacy is a Senior Web Content Writer at Finance of America and a journalist with more than 20 years of experience specializing in business, and technology. Her work has been published in The Wall Street Journal, The Financial Times, and numerous other leading outlets.
Disclaimer
This article is intended for general informational and educational purposes only and should not be construed as financial or tax advice. For tax advice, please consult a tax professional. For more information about whether a reverse mortgage fits into your retirement strategy, you should consult your financial advisor.
