4 Ways to Get Equity Out of Your Home Without Refinancing

Written by: Deb Hipp

Edited by: Amanda Hankel 

Reviewed by: Michael Menninger, CFP®

Refinancing lets you access your home’s equity by replacing your current mortgage with a new one—but it isn’t your only option.

You can take equity out of your home without refinancing. There are four main options to access cash without changing your existing mortgage:

1. Home equity line of credit (HELOC)
2. Home equity loan
3. Home equity agreement (HEA)
4. Home sale-leaseback

Here’s a closer look at how each option turns your home’s value into usable funds—and the key risks and benefits to consider.

Home equity line of credit (HELOC)

• How it works: Revolving credit line with a draw and repayment period
• Who it’s best for: Homeowners with at least 10%–20% equity who want flexible, on-demand access to cash and have a credit score of 620 or higher.

Do you have to refinance for a HELOC?

You don’t have to refinance to get a HELOC. A HELOC is a separate line of credit that works alongside your existing mortgage, allowing you to borrow against your home’s equity without replacing your current loan.

A HELOC functions like a revolving credit line: you can borrow as needed during the draw period (typically 5–10 years) and often make interest-only payments during that time. Once the repayment period begins, you’ll repay the principal and interest over a set term, usually 5–30 years.

HELOC vs. refinancing

Pros and cons

Pros

• Flexibility

Withdraw cash up to your credit limit whenever you need it during the draw period.

• Use cash for nearly any purpose

Pay for unexpected expenses, medical bills, major renovations, and more.

• Interest may be tax-deductible

You may be able to deduct interest on a HELOC from your income taxes.

• Lower interest rates

You may get a lower interest rate on a HELOC because your home serves as collateral.

Cons

• You could lose your home

Because your home is collateral, you could lose your home if you default.

• Appraisal required

You may need an appraisal of your home, which averages $400 to $500.

• Variable rates

If your interest rate goes up, monthly payments could become unaffordable.

• Taking on more debt

Borrowing more than you can afford could saddle you with too much debt.

Home equity loan

• How it works: Loan with fixed monthly payments 
• Who it’s best for: Homeowners who need a large, one-time lump sum for major expenses like renovations, tuition, or debt consolidation.

Can you get a home equity loan without refinancing?

A home equity loan doesn’t require refinancing. Like a HELOC, it’s a second mortgage that lets you access a lump sum of cash while keeping your existing mortgage in place.

A home equity loan provides a one-time payout based on your available equity, which you repay with fixed monthly payments over a set term (usually 5–30 years). Your home serves as collateral, and lenders typically allow borrowing up to around 85% of your home’s value, minus your remaining mortgage balance. Home equity loans usually come with closing costs and fees, similar to a traditional mortgage.

Approval is generally easier if you have at least a 620 credit score, sufficient equity, and a manageable debt-to-income ratio.

Home equity loan vs. refinancing

Pros and cons

Pros

• Fixed interest rate and consistent payments

Home equity loans typically have a fixed interest rate and monthly payment amount.

• May be tax-deductible

You may be able to deduct the interest on a home equity loan on your income taxes.

• Lower interest rates

Home equity loans often have lower interest rates than other types of loans.

• Longer repayment periods

Home equity loan repayment periods range from five to 30 years.

• Larger loan amount

You may qualify for a higher loan amount if you have a significant amount of equity.

Cons

• Risk losing your home

If you default on a home equity loan, you could lose your home, which is collateral.

• Closing costs

Home equity loans typically have closing costs of 2% to 5% and origination fees.

• Appraisal fee

You typically must have your home appraised, which averages $400 to $500.

• Additional debt

With a home equity loan, you now owe money on something you once owned.

Home equity agreement

• How it works: Loan from an investor who shares partial equity in your home
• Who it’s best for: Homeowners with lower credit scores who need cash but don’t qualify for a HELOC or home equity loan.

How it works to pull out equity without refinancing

With an HEA, also known as a home equity sharing agreement (HESA) or home equity investment (HEI), you receive a lump-sum cash payment from an investment company in exchange for giving the company the right to share in your home’s future change in value. You don’t make monthly payments during the agreement term, which typically lasts 10 to 30 years.

When the agreement ends—or if you sell your home earlier—you repay the original amount you received plus a percentage of your home’s appreciation. If your home’s value goes down instead of up, the amount you owe is reduced accordingly.

HEA vs. refinancing

Pros and cons

Pros

• No monthly payments

Make only a single payment at the end of the agreement.

• Shared risk

If your home depreciates, the investment company shares that loss and you owe less.

• Easier to qualify with poor credit

Even if your credit score is as low as 500, you may still qualify.

• Low income isn’t a barrier

There are generally no income requirements, so even low-income homeowners may qualify.

• No debt-to-income requirements

If you have too much debt to qualify for a home equity loan or HELOC, you may still qualify for the agreement.

Cons

• May pay more than expected

If your home appreciates greatly, you may pay a greater amount.

• Appraisal fees

Many investment companies require an appraisal on your home.

• Must repay the entire amount at the end

If you aren’t able to repay the entire amount owed once, you may have to sell your home to make one large payment.

Home sale-leaseback

• How it works: Sell your home for accrued equity and rent it from the new owner
• Who it’s best for: Homeowners who need a large amount of cash to stabilize their finances and want to stay in their home while eliminating their mortgage payment.

How it allows you to access home equity without a loan

A home sale-leaseback lets you convert your home’s equity into cash by selling the property to an investor and staying in it as a renter. Because you’re selling the home rather than borrowing against it, you get a lump-sum payout without taking on new debt.

After the sale, you remain in the home under a lease agreement, and the investor takes over responsibilities like major repairs, property taxes, and homeowners insurance. While this frees up cash and removes the burden of ownership costs, your rent may increase over time, and you no longer benefit from future home appreciation.

Home sale-lease back vs. refinancing

Pros and cons

Pros

• Receive a large cash payment without taking out a loan.

Use the money from selling your home for whatever you like.

• Stay in your home

You can keep living in the home as a renter.

• No property taxes

You’ll no longer have to pay a big tax bill annually.

• No paying for major repairs

As a renter, you won’t have to buy a new furnace or pay for home repairs.

Cons

• You have a landlord

Once you sell, you must answer to the investor and comply with a rental agreement.

• No building equity

When an investor owns your home, you no longer benefit if your home goes up in value.

• Fees could apply

You may pay closing costs, processing fees or real estate commissions on the sale.

• Rent can go up

Your rent could go up substantially over time.

"There are two good reasons to refinance over these other options:

1. To lower your interest rate
2. To lower your payment by stretching the mortgage over a longer period of time.

However, it must really be worthwhile to offset the closing costs." - Michael Menninger, CFP®

Pulling equity out of your house without refinancing: What else to consider

Before choosing how to access your home equity, it helps to understand how taxes, credit, and broader market conditions can affect your decision and long-term costs.

Taxes

Different equity options come with different tax implications. Some products, such as home equity loans and HELOCs, may allow you to deduct interest if the funds are used for qualifying home improvements. Because tax rules can change and eligibility varies, it is a good idea to speak with a tax professional before moving forward.

Credit score impact

Most home equity products require a hard credit inquiry, which can temporarily lower your score. After that, the impact depends on how much you borrow and how consistently you make payments. Keeping balances manageable and paying on time helps protect your credit.

Market conditions

Interest rate trends can influence which equity option is most suitable. Lower rates may make refinancing or a home equity loan more attractive, while rising rates can increase the value of flexible options like HELOCs. Home equity investments are influenced by how much your home appreciates over the agreement term.

"When choosing a method for taking equity out of your home without refinancing, we always start by understanding why you need the money, how much you need, and how soon. From there, it’s imperative to look at your balance sheet (assets and debts) and your cash flow. It’s also important to understand your spending habits to ensure whatever solution is recommended doesn’t end up being a bailout, and you find yourself in the same financial situation a year later." - Michael Menninger, CFP®

Should I Refinance My Mortgage? Or Get a Home Equity Loan or Line of Credit?

Alternatives that don’t involve taking equity out of your home

When evaluating ways to access home equity, you have several options if a HELOC, home equity loan, refinance, and home equity investment aren’t right for you.

Personal loans

Unlike equity-based products, a personal loan is unsecured, meaning you won’t have to use your home as collateral. Because of this, it often carries a higher interest rate.

Sell and downsize

Selling and downsizing are other options for extracting equity. This is perfect if the home no longer suits your needs or is overly spacious. It provides a lump sum payment, but it also involves moving, which isn’t ideal for everyone.

Rent out all or part of the property

Renting part or all of your home is another way to use your home’s value. It generates income but also introduces responsibilities as a landlord.

Government programs and grants

Depending on your situation, state and local governments, along with nonprofit organizations, offer programs and grants to help with home costs. These programs can provide financial relief without adding to your debt, but they often have strict qualification requirements.

Peer-to-peer lending

Peer-to-peer lending platforms can also be an avenue to get funds without going through a traditional financial institution. This online lending form often offers faster processing time but may come with higher interest rates.