Mortgage vs HELOC Comparison
Compare splitting your borrowing between an amortizing mortgage and an interest-only line of credit against putting it all in a mortgage.
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Splitting the borrowing gives a combined payment of $2,741.46 against $2,764.59 for an all-mortgage structure.
Combined monthly payment with a HELOC portion
$2,741.46
$1,935.21 on the $350,000 mortgage plus $806.25 interest-only on the $150,000 HELOC.
- All-mortgage payment
- $2,764.59
- Monthly difference
- −$23.13
- Interest over 5 years, split structure
- $121,724
- Interest over 5 years, all mortgage
- $104,784
Interest-only means the balance never falls
Paying only the interest-only minimum, your $150,000 HELOC balance will still be $150,000 in 5 years. Over that period you would pay $48,375 in interest and owe exactly what you started with.Mortgage plus HELOC$121,724
All in the mortgage$104,784
| Split | All mortgage | |
|---|---|---|
| Monthly payment | $2,741.46 | $2,764.59 |
| Interest over 5 years | $121,724 | $104,784 |
| Flexibility to redraw | Yes, on the HELOC | No |
A HELOC buys flexibility, not cheaper money. Its rate floats with prime and can change at any time. Clover Mortgage Inc. is a licensed mortgage brokerage. This calculator provides estimates for information only and is not an offer of credit, an approval, or financial advice.
Every mortgage is different. A Clover Mortgage broker can confirm what you actually qualify for across more than 50 lenders — at no cost to you.
Combined monthly payment
$2,741.46
Common questions
- Is a HELOC cheaper than a mortgage?
- Usually not. HELOC rates are typically higher than mortgage rates, and because interest-only payments never reduce the balance, the debt is still there years later. The advantage is flexibility, not cost.