A refrigerator is provided, including a cabinet formed with at least one refrigerated compartment, and a door pivotally mounted to the cabinet. A vented exhaust conduit is provided at least partially within an interior of the door and defines a pathway in fluid communication with an environment exterior of the cabinet. A water heater includes a heating element located at least partially within the vented exhaust conduit and configured to heat water supplied from the refrigerator, wherein heat generated by said heating element can escape through the pathway of the vented exhaust to said environment exterior of the cabinet. A hot water dispenser is positioned on the door that is configured to dispense hot water supplied from the water heater into a receiver vessel. A method of dispensing hot water is also provided. The method utilizes at least two distinct, user-initiated steps to permit the dispensing of hot water.