It is a rare interest rate environment when you have a HELoC rate sufficiently lower than a fixed-rate mortgage (still likely not lower than a variable rate mortgage ... which are not available in the U.S.A.

If not, they may consider building the ADU and down-sizing into it and renting out the main house.

The December 2024 report from the Austin Board of REALTORS® (ABoR) shows stable housing prices and balanced market conditions in the Austin metro as we reached year’s end.

Even in housing.  

@Jordan Miller most Class A & B rental properties bought since 2021 really don't cashflow from day one.Class B will take 1-3 years to start showing cashflow.Class A, 3-5 years.Current investors keep making the mistake of looking back at deals from 5-10 years ago when prices & interest rates were both a lot lower, but NOT rental rates.

2) If you do owner-occupied cashout refi for best rate, you technically have to live in the home for 12 months before renting it out. * Some responders here may suggest not worrying about that and renting it out anyways.

Flexibility in Loan Terms: Josh offered a unique hybrid product that let my friend lock in a portion at a fixed rate while leaving the rest variable.

Rates will at some point allow you to refinance.  

Thought about refinancing at the time, but didn't do it before rates exploded.

Interest rates are NOT high right now.