Cash-out refi example. Let’s say you still owe $100,000 on your home, and it’s currently worth $400,000. That means you have $300,000 in equity.

A cash-out refinance lets you borrow against your home's equity by replacing your current mortgage with a bigger one, giving you the difference in cash. Learn how it works — and key risks ...

The average refinance rate for a 30-year mortgage loan is now 6.70%, meaning that many homeowners would have to take on a new, higher mortgage rate to secure their cash-out refinance.

The bottom line. A $100,000 home equity loan, for many homeowners, could be preferable to a $100,000 cash-out refinance right now. But a loan isn't the only way to borrow equity.