What is your real, blended rate — and the cheapest way to borrow more?
Your “rate” isn’t one number once you carry more than one debt. This blends your first mortgage, any second or HELOC, and other balances into a single true rate — then shows the honest tradeoff between refinancing your whole first mortgage higher and leaving that low rate alone and adding a second.
When rates are higher, the real question behind a cash-out refinance is rarely “what’s the rate?” — it’s “what does borrowing this money actually cost me across everything I owe?” If your first mortgage is sitting at a low rate, refinancing the whole balance to pull cash out re-prices every dollar of it, while a second only charges the higher rate on the new money. Sometimes the higher-rate second is genuinely cheaper. This shows you which, with your own numbers and no agenda. It does not assume rolling every debt into your mortgage is smart — stretching a short car loan across 30 years can cost more even at a lower rate.
— Matt Mergo · NMLS #5638191 · Your debts today
2 · Borrowing more — refinance the first, or add a second?
What a “blended rate” is
If you owe $320,000 at 3.5% and $15,000 at 22%, you don’t really have a 3.5% rate or a 22% rate — you have a weighted average of the two, weighted by how much you owe on each. That weighted average is your blended rate, and it’s the honest number for judging what your debt actually costs. Because the big low-rate mortgage dominates, a small high-rate balance moves the blend less than people fear — which is exactly why the math is worth seeing.
Why a higher-rate second can beat a cash-out refinance
This is the core of the tool. A cash-out refinance replaces your whole first mortgage, so the new rate applies to every dollar you already owe — not just the cash you’re taking out. If your first is at a low rate, that re-pricing is expensive. A second mortgage or HELOC leaves the first untouched and charges its higher rate only on the new money. So even when the second’s rate looks worse on paper, the total interest can be lower, because you kept the cheap money cheap. When your first mortgage rate is close to today’s rates, the refinance often wins instead. There’s no universal answer — that’s what the comparison is for. If the property is a Texas homestead, the ceiling is lower and set by the state constitution rather than by an agency guideline — see the Texas cash-out rules before you run the numbers.
The honest caveat on consolidating
Lowering the rate on a balance is not the same as lowering what it costs you. Move a 4-year car loan into a 30-year mortgage and the monthly rate falls, but you can pay far more interest over those extra 26 years. I look at these case by case and rarely recommend rolling in auto loans. Use this to see the true cost of the borrowing — then let’s talk through whether it’s actually the right move.
Related reading
The full comparison behind this tool is in cash-out refinance vs. HELOC — including a worked example where the higher-rate line costs several hundred dollars a month less. If the question is how much you can take out and whether you have waited long enough, see the LTV limits and seasoning rules.
Educational estimate, not a quote, a commitment to lend, or an offer of credit. “Interest per month” figures are simple monthly interest on the balances and rates you enter (balance times annual rate divided by twelve) and are meant for comparison; they are not a full monthly payment and exclude principal, taxes, insurance, mortgage insurance, and closing costs, which affect real cost. Cash-out refinancing replaces your existing first mortgage; a second mortgage or HELOC is separate financing with its own terms. Rates, eligibility, and whether any option is available depend on your credit, equity, and lender. Forest Hills Mortgage · Matt Mergo, NMLS #563819. Equal Housing Opportunity.