HELOC, Cash-Out Refi or Sell? Tapping Home Equity in Florida

Tapping home equity in Florida usually comes down to three choices: borrow against the home with a HELOC, replace your mortgage with a cash-out refinance, or sell and move. Each one turns the value you have built into cash. However, each one also has a different cost, a different risk and a different effect on your property taxes. This guide compares the three for owners in Palm Beach County, Hobe Sound and Port St. Lucie, with current rate data and the Florida rules that change the math.

Key takeaways

• Bankrate put the national average HELOC rate at 7.29% on September 30, 2026. Freddie Mac's 30-year fixed average was 7.03% on September 24, 2026.
• A cash-out refinance replaces your whole mortgage. If your current rate is lower than today's, that can raise the cost of every dollar you already owe.
• Florida charges documentary stamp tax of 35 cents per $100 on new notes, plus a 0.2% intangible tax on new mortgages. Both can apply when you borrow.
• Selling avoids new debt. Florida's portability rule lets you carry up to $500,000 of Save Our Homes benefit to a new Florida homestead.
• Home equity interest is deductible only if you use the money to buy, build or substantially improve the home that secures the loan.

How much equity do you have to tap?

Equity is what your home would sell for today, minus every loan secured by it. For example, a home worth $650,000 with a $250,000 mortgage has $400,000 in gross equity. That figure matches the Palm Beach County single-family median in August 2026, according to Miami Realtors.

Lenders will not let you borrow all of it, though. They cap the total of all loans at a share of the home's value, and they set that share themselves. So the cash you can actually reach is smaller than your gross equity. Our guide on how to calculate home equity walks through the numbers, and a current home value report gives you a better starting point than a tax bill.

Option 1: tapping home equity in Florida with a HELOC

A home equity line of credit works like a credit card secured by your house. You get a credit limit, draw what you need and pay interest only on what you use. Most HELOCs have a variable rate, so your payment can rise when rates rise.

Bankrate's survey put the national average HELOC rate at 7.29% on September 30, 2026. Its listed range ran from 3.99% to 11.60%, depending on the lender, the borrower and the loan. Your rate will depend on your credit, your loan size and how much equity remains after the line.

When a HELOC fits

A HELOC tends to fit when you need money in stages, such as a renovation, and you plan to stay in the home. It also lets you keep your first mortgage. That matters if your first mortgage carries a rate well below today's rates.

HELOC risks to weigh

Federal rules let a lender freeze or reduce a HELOC in some cases, including when the home's value drops significantly. So a line you count on may not be there when you need it. Also, the variable rate can make long-term costs hard to predict. Finally, a HELOC is a lien on your home. If you sell, it must be paid off at closing along with your first mortgage.

Option 2: tapping home equity in Florida with a cash-out refinance

A cash-out refinance pays off your current mortgage with a new, larger one. You get the difference in cash at closing. The new loan usually carries a fixed rate, so the payment is predictable.

Freddie Mac's survey put the average 30-year fixed rate at 7.03% on September 24, 2026, and the 15-year rate at 6.42%. Cash-out loans often price a bit higher than a standard refinance. Ask lenders for a written Loan Estimate to compare.

The rate trade-off

Here is the catch. A cash-out refinance replaces your entire balance, not just the new cash. Say you owe $250,000 at a low rate from a few years ago. If you refinance to pull out $100,000, the full $350,000 now carries today's rate. In that case, a HELOC on top of your current loan may cost less, even at a higher rate on the smaller amount.

Closing costs and Florida taxes

A refinance comes with closing costs, such as lender fees, title insurance and recording fees. Florida also charges documentary stamp tax on notes at 35 cents per $100, and a 0.2% nonrecurring intangible tax on new mortgages. On a large new loan, those state taxes alone can add up to thousands of dollars. A HELOC can trigger them too, so ask your lender how they will be figured.

Option 3: tapping home equity in Florida by selling

Selling turns your equity into cash without new debt. You pay off the mortgage and any HELOC at closing, and the rest is yours after selling costs. Then you can buy a smaller home, rent or move closer to family.

The Palm Beach County market gives sellers a fair amount of room right now. In August 2026, Miami Realtors reported a single-family median of $650,000, a median of 40 days to contract and 3.5 months of supply. Condos and townhouses moved slower, with a $300,000 median, 69 days to contract and 6.7 months of supply.

Timing is the other worry. Many sellers ask where they will live between homes. A short rent-back after closing can bridge the gap, and so can a purchase contract tied to the sale of your current home. Also, owners in Jupiter or Wellington who bought many years ago may have enough equity to buy the next home with cash or a much smaller loan. That can make their offer stronger and keep a new mortgage small.

Homestead portability

Many long-time owners worry that a move will reset their property taxes. Florida's portability rule softens that. It lets you move up to $500,000 of your Save Our Homes benefit to a new Florida homestead. If you buy a less expensive home, you carry a proportional share. You must set up the new homestead by January 1 of the third year after leaving the old one. Our homestead portability guide explains the steps.

Capital gains

The IRS lets most owners exclude up to $250,000 of gain on a main home, or $500,000 for married couples filing jointly, if they meet the ownership and use tests. Gains above that may be taxed. So if you have owned for decades, ask a tax advisor to run your numbers before you list.

Comparing the options for tapping home equity in Florida

Each path answers a different need. Here is a quick side by side.

• HELOC. Keeps your first mortgage and lets you draw over time. The rate is usually variable, and the lender can freeze the line in some cases.
• Cash-out refinance. Gives you one fixed payment, but resets your whole balance to today's rate. Closing costs and Florida taxes apply.
• Selling. Ends the debt instead of adding to it. You pay selling costs and move, but portability can protect much of your tax benefit.

Questions to ask before tapping home equity in Florida

Start with what the money is for. A roof or impact windows may add value and lower insurance costs. Paying off high-rate debt may save interest, but it turns unsecured debt into debt secured by your home. Then ask a few more questions.

• How long do you plan to stay? If you might sell within a few years, borrowing costs may not pay off.
• Can you handle a higher payment if a variable rate rises?
• What rate is on your current mortgage, and what would a refinance do to it?
• Would a smaller home cut your insurance, taxes and upkeep enough to change the picture?

Our HELOC calculator can help you test the borrowing side. For the selling side, a net sheet from a local agent shows what you would walk away with.

Taxes on tapping home equity in Florida

Florida has no state income tax, so the main tax questions are federal. IRS Publication 936 says interest on a home equity loan or line is deductible only if you use the money to buy, build or substantially improve the home that secures it. Interest on money used for a car, tuition or a vacation is not deductible as mortgage interest. Keep receipts if you plan to use the funds for improvements.

Frequently asked questions

What is the cheapest way of tapping home equity in Florida?

It depends on your current mortgage rate and how much you need. If your first mortgage rate is low, a HELOC often costs less than resetting the whole loan with a cash-out refinance. Compare written estimates, including Florida taxes and fees.

Can a lender freeze my HELOC?

Yes, in some cases. Federal rules allow a lender to freeze or reduce a line when the home's value drops significantly, among other reasons. Read your HELOC agreement for the exact terms.

Will I lose my homestead savings if I sell?

Not necessarily. Portability lets you move up to $500,000 of your Save Our Homes benefit to a new Florida homestead, as long as you set it up within the deadline and file on time.

Do I have to pay off a HELOC when I sell?

Yes. A HELOC is a lien on the home, so the title company pays it off from your sale proceeds at closing, along with your first mortgage.

Is HELOC interest tax deductible?

Only if you use the money to buy, build or substantially improve the home that secures the loan. Ask a tax advisor about your own case.

Sources

• Bankrate, Current HELOC rates
• Freddie Mac, Mortgage rates average 7.03% (September 24, 2026)
• Consumer Financial Protection Bureau, Regulation Z 1026.40 (home equity plans)
• Florida Department of Revenue, Documentary stamp tax
• Florida Department of Revenue, Nonrecurring intangible tax
• Palm Beach County Property Appraiser, Portability
• IRS Publication 936, Home mortgage interest deduction
• IRS Publication 523, Selling your home
• Miami Realtors, Palm Beach County August 2026 home sales

This article is general information, not legal, tax or financial advice. Pure Equity does not lend money. Talk with a licensed lender and a tax advisor before you borrow against or sell your home.

Curious what selling would put in your pocket? We will compare your likely sale price and net proceeds with your borrowing options, so you can decide with real numbers. Get a free Pure Equity home value report or talk with us. Buying your next home? Ask us how portability can travel with you.