How a First-Lien HELOC Works: Complete Guide and Highest-Rated Lenders

A first-lien home equity line of credit (HELOC) lets you tap into your home’s equity while taking the primary lien position, meaning it’s your main mortgage.

This setup can be beneficial if you own your home outright or use the HELOC to pay off your current mortgage. It offers unique advantages, including flexible access to funds and potentially lower repayment rates than your current mortgage. These are our highest-rated companies offering first-lien HELOCs:

Best first-lien HELOC lenders

Numerous lenders offer first-lien HELOCs, including banks, credit unions, and online mortgage lenders. When comparing lenders, it’s important to consider credit requirements, equity requirements, HELOC borrowing limits, and interest rates. 

Here’s how the best first-lien HELOC lenders stack up.

Figure

Best Overall

4.9 _/5

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Why it’s one of the best

• Borrow up to $400K, redraw up to 100%
• Fixed rates
• Digital app & online appraisal
• Check your rate without affecting your credit

Figure HELOCs are available for single-family residences, townhouses, planned urban developments (PUDs), and most condos. Figure’s first-lien HELOCs include shorter terms, no closing costs or out-of-pocket costs, fixed interest rates, the ability to redraw, and quick access to cash.

No in-person appraisal is needed. It’s possible to get approved in as little as five minutes, with access to funding in as few as five days. The minimum credit score requirement for a Figure HELOC is 640 in most states. 

Note that you must draw 100% of the funds at HELOC origination. As you repay, it replenishes available credit, which you can then redraw.

HELOC details

Rates (APR)	5.14% – 12.25% fixed
Loan amounts	$20,000 – $400,000
Repayment terms	5, 10, 15, or 30 years
Availability	Not available in Hawaii, Kentucky, New York, or West Virginia

Aven

Best Customer Reviews

4.8 _/5

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Why it’s one of the best

• Lowest rate guarantee
• Optional debt protection program through Securian
• Approval in as little as 15 minutes
• Excellent Trustpilot reviews from more than 3,800 customers (in September 2024)

Aven’s first-lien HELOC combines fixed interest rates, a quick approval process, and digital convenience. You can borrow up to $400,000 with competitive fixed rates and access funds in as little as three days after signing. Aven’s streamlined, 100% digital application includes automated appraisals, making it easy to apply without an in-person appraisal.

Aven requires you to draw the full HELOC amount at origination, but the fixed-rate feature provides stability in your payments, making it ideal for borrowers who need immediate access to the full credit line and prefer predictable monthly payments.

HELOC details

Rates (APR)	6.99% – 15.49% fixed
Loan amounts	$5,000 – $400,000
Repayment terms	5, 10, 15, or 30 years
Availability	Available in 32 states*

FourLeaf

Best Credit Union

4.7 _/5

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Why it’s one of the best

• No closing costs or origination fees
• Low introductory rate for qualified borrowers

FourLeaf Federal Credit Union offers first-lien HELOCs for individuals who want a home loan and don’t have a mortgage with another lender—or will use their HELOC funds to pay off their first mortgage.

A FourLeaf FCU first-lien HELOC has no fees or closing costs, on lines up to $500,000. FourLeaf offers a variable rate with the option to fix for the full or a portion of the line.

FourLeaf considers your home equity, income, and credit score when approving a loan. Borrowers must also meet membership requirements to join FourLeaf FCU as a condition of applying for a first-lien HELOC.

HELOC details

Rates (APR)	12-month introductory rate starting at 6.99% for VantageScores of 720 and up, with variable post-introductory rates starting at 8.50%
Loan amounts	$10,000 – $1 million
Repayment terms	20 years
Availability	Available in all states except Texas

What does it mean to be the first lien?

A lien represents a legal claim to property that’s associated with a debt. When someone takes out a mortgage to buy a home, the lender is in the first-lien position. If the borrower defaults on the mortgage, the lender can initiate foreclosure proceedings to take the home back.

Second-position liens also represent a legal claim to property that’s used to secure a debt. Ordinarily, a home equity loan or HELOC is considered a type of second lien or second mortgage.

The difference matters because a second lien is subordinate to a first lien. So if a borrower defaults on a debt obligation, the creditor in the first-lien position takes priority for getting repaid. 

Are there benefits to borrowers with a first-lien HELOC?

A HELOC can be attractive to homeowners who want to be able to access their equity through a revolving line of credit. Homeowners might prefer a first-lien HELOC over a second mortgage for several reasons.

For instance, you might consider a first-lien HELOC if you:

• Want to use the HELOC to pay off the remaining balance on your first mortgage loan.
• Are nearing the end of your mortgage term and want to maximize any remaining mortgage interest deductions you’re able to claim.
• Would like to pay a lower interest rate for mortgage debt.

First-lien HELOCs may be easier to qualify for than second-lien HELOCs, and they may offer more favorable interest rates. Second liens tend to be riskier for lenders and may have stricter credit requirements or carry higher interest rates.

First-lien HELOCs typically offer the same benefits as second-lien HELOCs. That includes access to a flexible credit line via debit card, paper checks, or electronic transfers to a bank account. Other potential benefits include lower interest rates, longer draw periods, less stringent credit requirements, and higher borrowing limits.

How to get a first-lien HELOC

You might be able to get a first-lien HELOC in two instances:

1. The first mortgage is paid off. If you already repaid your original mortgage in full, the home has no liens at this point, so a HELOC would be the only outstanding debt and, thus, the first lien on the home. This benefits you because you can draw against your equity as needed, and you may be able to deduct the interest you paid.
2. Use the funds from the HELOC to pay off your mortgage. The HELOC would then become the first lien, replacing the mortgage and leaving you with just one monthly payment to make. In this case, you can replace your old mortgage with a new one at a potentially lower interest rate. You can draw against your home’s equity to cover expenses, and you might also get the benefit of a mortgage interest deduction. 

Does having a first-lien HELOC let me tap into more equity?

It’s up to each lender to determine how much you can borrow with a first-lien HELOC. Generally, lenders look for borrowers with a maximum loan-to-value ratio in the 80% to 90% range, though some might bump that up to 95%. 

A first-lien HELOC could allow you to borrow more than a second-lien HELOC if your lender allows for a higher max LTV on that product. 

Here’s an example of how much equity you might be able to tap into if you’d like to replace your current mortgage with a first-lien HELOC:

Home value	Outstanding mortgage debt	Lender’s max LTV (80%)
$300,000	$150,000	$240,000

If you subtract the outstanding mortgage debt ($150,000) from your lender’s max LTV ($240,000), you’d have $90,000 of the HELOC left after paying off the first mortgage.

Should you replace your mortgage with a first-lien position HELOC?

A first-lien HELOC can be an attractive tool to replace a primary mortgage, but before doing so, ask yourself:

• Is the HELOC interest rate more favorable? If so, paying off your mortgage with the HELOC could make sense. You’d still have the ability to draw on your remaining equity to use any way you’d like. And since you’d only have one loan, you’re not adding another mortgage payment to your monthly budget. 
• Is the HELOC rate fixed or variable? A variable-rate option means monthly payments are less predictable. A significant increase in your HELOC payment could put a serious strain on your budget. 
• Does the HELOC fit your budget?Since a first-lien HELOC is secured by your home, you accept the risk of losing your property if you default. So it’s important to determine where a first-lien HELOC might fit into your budget and what resources you’d have to fall back on to make loan payments if your job or income situation changes. 
• Can you afford more than interest-only payments during the draw period? If not, you could face a large amount of principal left to pay down once the repayment period begins. 

A first-lien HELOC may not be the right choice for all homeowners, but the benefits it yields are valuable in certain cases. You can use a first-lien HELOC to refinance your primary mortgage while gaining flexibility from access to your equity. 

If you’re interested in a first-lien HELOC, we recommend shopping around for the best offers before moving forward. 

How we selected the best first-lien HELOCs

Since 2018, LendEDU has evaluated home equity companies to help readers find the best home equity loans and HELOCs. Our latest analysis reviewed 850 data points from 34 lenders and financial institutions, with 25 data points collected from each. This information is gathered from company websites, online applications, public disclosures, customer reviews, and direct communication with company representatives.

These star ratings help us determine which companies are best for different situations. We don’t believe two companies can be the best for the same purpose, so we only show each best-for designation once.

Recap of the top first-lien HELOCs