A first lien HELOC beats your mortgage only when its rate is about the same as the one you already pay. On a $300,000 balance at 3.5%, swapping into a first lien HELOC at an example 7.5% costs roughly $11,400 to $11,700 more in the first year, even after a sweep account does its thing. On a $60,000 balance at 7%, the same swap is close to a wash, and you walk away with an open line of credit.
So the math comes down to two numbers: your mortgage rate and your balance. If your home is already paid off, there’s no mortgage to lose, and Figure is the quickest place to see a real first lien HELOC rate with a soft credit pull. If you have a low fixed rate, keep it and put a regular HELOC behind it instead.
- APRs from 7.35% to 14.85% as of October 2026
- Offers first lien HELOCs, including on homes that are fully paid off
- Lines start at $15,000
- Check your rate with a soft credit pull
- Funding in as few as 5 days on loans under $400,000
Our take: The sweep account is real, but it’s small. It saves you the HELOC rate on whatever cash sits in the account, which for most people is a few hundred bucks a year. That can’t cover a jump of three or four points on a six-figure balance. Run the break-even table below with your own rate before you listen to anyone selling a five-year payoff.
What changes when a first lien HELOC replaces your mortgage
A first lien HELOC takes the spot your mortgage holds now.
It either sits alone on a paid-off house, or it pays off your mortgage at closing and becomes your home loan.
Either way, you’re trading one kind of debt for another, and the trade looks like this:
| What changes | Your mortgage | A first lien HELOC |
|---|---|---|
| Rate | Usually fixed for the life of the loan | Usually variable, tied to the prime rate or SOFR |
| Payment | The same principal and interest every month | Often interest-only during the draw period, then principal and interest on what’s left |
| Access to cash | None without a refinance or a second loan | Draw again during the draw period as you pay it down |
| Your old rate | Stays | Gone for good |
| Taxes and insurance | Usually paid through escrow | Usually moves into the HELOC payment |
A first lien HELOC on a paid-off home has no old rate to lose, which is why it’s the easy case.
That third row is the whole pitch. The fourth row is the whole cost.
Worked example: $300,000 at 3.5%
Say you owe $300,000 at 3.5% with 25 years left. Your principal and interest payment is about $1,502 a month, and about $10,378 of the first year’s payments is interest.
Now move that same $300,000 to a first lien HELOC at an example rate of 7.5%. That’s a big jump.
Interest alone is $22,500 a year, or $1,875 a month, and none of that touches principal.
Add a sweep account. If $6,000 to $10,000 sits in it on an average day, it trims $450 to $750 a year off the interest.
| First year | Mortgage at 3.5% | First lien HELOC at 7.5% |
|---|---|---|
| Balance | $300,000 | $300,000 |
| Monthly payment | About $1,502 (principal and interest) | $1,875 (interest-only) |
| Interest before the sweep | About $10,378 | $22,500 |
| Sweep savings ($6,000 to $10,000 average balance) | None | $450 to $750 |
| First-year interest | About $10,378 | $21,750 to $22,050 |
| Extra cost of switching | About $11,400 to $11,700 |
Example rate only. Mortgage interest is from a standard 25-year amortization of $300,000 at 3.5%.
You pay more every month and more every year, and you’ve swapped a fixed rate for a floating one.
What about the “pay off your house in five to seven years” pitch? It comes from putting your monthly surplus toward principal. You can do that with the mortgage you already have.
On the same $300,000 at 3.5%, paying an extra $1,000 a month clears it in about 12 years instead of 25, and cuts total interest from about $150,600 to about $69,700. You keep your fixed rate the whole way.
Worked example: $60,000 at 7%
Flip the numbers. Say you owe $60,000 at 7%.
That’s roughly $4,200 a year in interest. A first lien HELOC at 7.5% with $6,000 sitting in the sweep charges interest on about $54,000, which is roughly $4,050.
| First year | Mortgage at 7% | First lien HELOC at 7.5% |
|---|---|---|
| Balance | $60,000 | $60,000 |
| Average cash in the sweep | None | $6,000 |
| Balance you pay interest on | $60,000 | About $54,000 |
| First-year interest | About $4,200 | About $4,050 |
| Difference | About $150 in the HELOC’s favor |
Example rate only.
Close to a wash.
The difference is what you get on top: an open line of credit and a balance that drops every payday. That’s the situation these products were built for, a small balance at a rate that’s already near HELOC pricing, owned by someone who brings in a lot more than they spend.
The break-even rate at every mortgage rate
Here’s the shortcut. Take your first-year mortgage interest and divide it by what you’d owe on the HELOC after the sweep. That’s the HELOC rate you’d need just to tie.
On a $300,000 balance with 25 years left and $8,000 sitting in the sweep on an average day:
| Your mortgage rate | First-year mortgage interest | HELOC rate needed to break even |
|---|---|---|
| 3% | About $8,890 | About 3.04% |
| 3.5% | About $10,380 | About 3.55% |
| 4% | About $11,870 | About 4.07% |
| 5% | About $14,860 | About 5.09% |
| 6% | About $17,860 | About 6.11% |
| 7% | About $20,860 | About 7.14% |
Our calculation. Break-even rate = first-year mortgage interest divided by $292,000 ($300,000 minus the $8,000 average sweep balance).
Now hold that against real pricing. The lowest advertised first lien HELOC APRs we found were 7.25% at Navy Federal (for a 750 FICO, a primary residence and a 70% maximum HLTV) and 7.35% at Figure.
So if your mortgage is under about 7%, the advertised starting rates don’t clear the bar. That’s before the rate moves.
If your home is paid off, there’s no rate to beat. Figure checks your rate with a soft credit pull.
What the sweep account is really worth
A sweep account links checking to the HELOC. Your paycheck lands, pays down the balance, and you draw back out as bills come due. Interest is figured on the daily balance.
So every dollar parked there saves you the HELOC rate while it sits.
That’s the whole trick. The savings equal your average cash balance times the rate:
| Average cash in the sweep | Yearly savings at 7.5% |
|---|---|
| $5,000 | $375 |
| $6,000 | $450 |
| $10,000 | $750 |
| $20,000 | $1,500 |
Example rate only. Savings shrink if the rate falls and grow if it rises.
Even $20,000 parked every day saves $1,500.
On the $300,000 example, the rate jump costs about $12,100 before the sweep. The sweep can’t close that.
The other cost is discipline. A line of credit you can draw from with a debit card is easy to treat like a checking account with no bottom. If your monthly surplus is thin or uneven, the balance can stall instead of falling.
FNBA’s FlexFirst HELOC and CMG Financial’s All In One Loan are both built around this setup, with a sweep checking account attached. University Lending Group offers an optional sweep account on its first lien HELOC.
What a $50,000 HELOC costs per month
Interest-only draw periods make a HELOC payment look small. Then the draw period ends.
At an example 8% APR on a $50,000 balance:
| How you pay | Monthly payment |
|---|---|
| Interest-only during the draw period | About $333 |
| Paid off over 15 years | About $478 |
| Paid off over 10 years | About $607 |
Example rate only. A variable APR changes these numbers every time the rate moves.
Go from interest-only to a 10-year payoff and the payment nearly doubles. Navy Federal warns about exactly that jump for its interest-only option. If you’re comparing a HELOC to your mortgage, compare the repayment number, not the draw period one.
Want your own figures? Our HELOC payment calculator runs any balance, rate and term, and the $100,000 payment breakdown shows a bigger line at every rate.
Escrow and opening costs
Once a HELOC is in first position, property taxes and insurance usually ride along in its payment, the same way they do on a mortgage.
Navy Federal’s disclosures say the member pays prepaid interest and escrow on first lien HELOCs. FNBA’s FlexFirst draw period payment is interest plus escrow on a primary residence.
Two things follow.
First, compare like with like: your mortgage payment with escrow against the HELOC payment with escrow. Second, if your house is paid off and you pay taxes and insurance yourself today, plan for that money to start running through the HELOC payment.
Then there’s the cost to open. Whatever you pay at closing comes straight out of the savings, so add it to the HELOC side before you decide.
Ask every lender for its full list in writing.
On the $60,000 example, the HELOC saves about $150 a year. Every $600 of opening cost takes four years of those savings to earn back. On a paid-off home, there’s no savings to earn back, so what you’re comparing is the cost of the line against a personal loan or a credit card.
Should you replace your mortgage with a HELOC? The decision table
| Your situation | What usually wins | Where to look |
|---|---|---|
| Home paid off, want a line of credit | A first lien HELOC | Figure for speed and a soft-pull rate check. Navy Federal if you’re eligible |
| Mortgage rate in the 3% to 5% range | Keep the mortgage. Add a second lien HELOC if you need cash | A HELOC from Upstart Home Lending |
| Small balance near HELOC rates, big monthly surplus | A first lien HELOC with a sweep could be close to even | FNBA FlexFirst or CMG’s All In One Loan |
| Retired or income hard to document | A home equity investment, with no monthly payments | Splitero |
| Can’t handle a payment that moves | Keep the mortgage | Skip the first lien HELOC |
Most people with a mortgage from the low-rate years land in the second row. That’s fine. It means the cheapest money you have is the loan you already took out.
If you want to compare who actually offers one before you get a quote, here is a list of banks that offer a first lien HELOC and what each requires.
Where to get a quote
Start with what your situation needs. Want a deeper look at what a first lien HELOC is before you price one? This first lien HELOC explainer covers how lien position works and how to get one.
Home paid off? Start with Figure
Figure offers both first lien and second lien HELOCs, including on homes that are fully paid off. It can also pay off the most junior lien on the property at closing, mortgages included.
APRs run 7.35% to 14.85% as of October 2026, and lines start at $15,000. Anything over $400,000 needs an appraisal, and funding can come in as few as 5 days on loans under $400,000. The minimum credit score is set by state.
It isn’t available in New York.
There’s a fixed rate option, too. That line is fully drawn at closing, minus an origination fee of 0% to 4.99% of the draw, and you redraw as you pay it down. Our Figure HELOC review walks through the rest.
See your number at Figure. Checking your rate is a soft credit pull.
Keeping your mortgage? Price a HELOC from Upstart Home Lending
If your mortgage rate is worth keeping, a regular second lien HELOC leaves it alone. Your rate, payment and payoff date stay where they are.
The HELOC from Upstart Home Lending is worth a second quote for that. APRs run 6.52% to 18.00%1, lines run $26,000 to $250,000, and there are 10 and 15 year terms. The lowest APR is available only to borrowers who meet specific eligibility conditions.
It’s an easy, online application, and checking your APR is a soft pull. One rule to know: you take at least 80% of your line at closing. Our Upstart Home Lending review covers the costs.
Retired or income hard to document? Look at Splitero
Most HELOC lenders want income they can verify, which is a problem if you own outright and live on savings.
Splitero is a home equity investment, not a HELOC. There are no monthly payments and no income requirement, and terms run 10 to 30 years. The tradeoff is that you give up a share of your home’s value when you exit, so it usually costs more than a HELOC if the home goes up in value. Our HEI vs HELOC comparison shows how the two stack up.
Navy Federal Credit Union’s HELOC can sit in first position. Membership is open to the armed forces, the DoD, veterans and their families. Lines run $10,000 to $500,000 with a 20 year draw period and a 20 year repayment period, Navy Federal pays the closing costs, and closing takes about 30 to 40 days. It isn’t available in Texas.
FNBA’s FlexFirst HELOC replaces your mortgage, with a variable rate based on the 30 day average SOFR, a 10 year interest-only draw period and a 20 year repayment period. CMG Financial’s All In One Loan goes up to $2 million on a 30 year term and is sold through mortgage brokers and loan officers in select markets.
Some regional banks and credit unions offer first lien HELOCs too, often only in their own area. It’s worth asking yours.
Bottom line: on a paid-off home, a first lien HELOC is usually a cheaper line of credit than a personal loan or a credit card, and Figure is the quickest number to get. With a 3% or 4% mortgage, the swap loses money. Keep the mortgage, add a regular HELOC if you need cash, and make extra principal payments if you want the house paid off sooner.
First lien HELOC vs mortgage questions, answered
Only when its rate is about the same as your mortgage rate. On a $300,000 balance at 3.5%, a first lien HELOC at an example 7.5% costs roughly $11,400 to $11,700 more in the first year, even with $6,000 to $10,000 sitting in a sweep account. On a small balance at a rate already near HELOC pricing, like $60,000 at 7%, it can come out close to even.
Not if your mortgage rate is in the 3% to 5% range. Keep it, and if you need cash, add a regular second lien HELOC behind it, like a HELOC from Upstart Home Lending. Replacing a mortgage makes the most sense on a small balance, at a rate near what HELOCs charge, with a big monthly surplus to run through a sweep account.
Your average cash balance times the HELOC rate. At an example 7.5%, an average of $6,000 saves $450 a year and $10,000 saves $750. That helps, but it can’t offset a rate that’s three or four points higher on a large balance.
Divide your first-year mortgage interest by your HELOC balance after the sweep. On $300,000 with 25 years left and $8,000 in the sweep, a 3.5% mortgage needs a HELOC rate of about 3.55%, and a 7% mortgage needs about 7.14%.
Usually, yes. Once the HELOC is in first position, property taxes and insurance typically move into its payment, the same as a mortgage. Navy Federal’s disclosures cover escrow on first lien HELOCs, and FNBA’s draw period payments are interest plus escrow.
Any HELOC on a home with no mortgage is in first position. Figure offers first lien HELOCs on paid-off homes, and checking your rate is a soft pull. Navy Federal is another option if you’re eligible for membership.
Run your own number first.
A real rate is the only way to fill in the break-even table. Both of these start online.
First and second lien HELOCs. Soft-pull rate check, and funding in as few as 5 days on loans under $400,000.
Keep reading
ReviewFigure HELOC ReviewRates, fees, the full draw and who qualifies.
ReviewUpstart Home Lending HELOC ReviewThe costs, the 80% draw and who it fits.
RatesTD Bank HELOC RatesWhat TD charges and the catches to know.
1 Upstart Home Lending: Terms shown here are subject to change without notice. APRs for initial advances range from 6.52% to 18.00% based on rates offered as of June 2026. The lowest rate is only available to consumers willing to become a member of a credit union and to those who meet a minimum FICO score of 780, CLTV under 70%, and DTI under 45%. Your actual rate will depend on many factors such as your credit history, combined loan-to-value ratio (CLTV), line amount, loan term, lien position, and property state. Origination fee to open an account is between 0% and 4.99% of the approved credit limit. The Annual Percentage Rate (“APR”) is variable and based on the Prime Rate as published in the Wall Street Journal “Money Rates” table plus or minus a margin. Your APR will never be less than 3.99% or greater than 18.00%. Property insurance is required.
Upstart Mortgage, LLC dba Upstart Home Lending. NMLS #2443873. Equal Housing Opportunity.
Worked examples use example rates for illustration. Terms, pricing and availability change. Check the current terms with each lender before you apply.