First Lien HELOC Calculator

How to Read the Results

The calculator compares two scenarios side by side. The first column shows the total interest you would pay on a traditional 30-year fixed mortgage at 6.5%. The second column shows the total interest on a first lien HELOC at the rate you entered, assuming you apply your full monthly surplus against the principal balance. The third column shows your total savings and the years required to pay off the loan.

Even though the HELOC rate is typically higher than a mortgage rate, the combination of average daily balance interest calculation and aggressive principal reduction produces dramatically lower total interest. The strategy works because you are exposed to interest for 5-7 years instead of 30.

Inputs Explained

Mortgage Balance

Your current outstanding mortgage balance. This is the amount you would refinance into a first lien HELOC. If you are still in the early years of a 30-year mortgage, this is typically close to your original loan amount. Check your most recent mortgage statement for the exact figure.

HELOC Rate

The interest rate on the first lien HELOC. First lien HELOCs are variable-rate products tied to a treasury bond index (such as the 1-Month T-Bill, 1-Year T-Bill, or 1-Year CMT) plus a fixed margin. As of early 2026, expect rates in the 6.5%-8.5% range depending on your credit profile, equity position, and lender margin. Use a conservative estimate to stress-test your savings.

Monthly Surplus

Your average monthly take-home income minus all your expenses (mortgage payment, utilities, groceries, insurance, transportation, debt payments, discretionary spending, savings contributions). This is the dollar amount that historically would have been left over each month — and is now applied directly against the HELOC balance under the velocity banking strategy.

FirstLienHELOC.com is an educational platform. We are not a licensed lender. Results vary based on individual financial circumstances.