Your mortgage and your checking account, in one place.
With Fairway's Home Equity Optimizer, your paycheck lands on the mortgage balance the day it arrives. Every dollar you haven't spent yet cuts your interest. For the right household it pays a home off years early. For the wrong one it costs more than a plain 30-year fixed. Here's how to tell which one you are.
Same household, paid off in
$10,000 a month of pay, $4,000 of spending on top of the mortgage. Hypothetical example; loan terms from the lender's sample illustration.
Same house. Different plumbing.
A traditional mortgage and your bank account never touch. This product merges them. It replaces your first mortgage, and your income runs through it.
A traditional mortgage
- One payment a month. The balance goes down on a fixed schedule.
- Your paycheck sits in checking and savings, earning a savings rate.
- Extra principal payments are locked in the house. Getting them back means a refinance or a HELOC.
- Fixed rate: the payment never changes.
The Home Equity Optimizer
- A first-lien line of credit with a debit card and bill pay. Your pay deposits straight onto the balance.
- Interest is charged on the balance at the start of each month, then your deposits, less your spending and that interest, come off at month end.
- Every dollar you've paid down stays available to draw, up to your line.
- Variable rate: an index (30-day SOFR) plus a margin, adjusting monthly.
- The line is open in full for 10 years, then steps down a little each month until it reaches $0 at year 30.
"Paid off years early." Compared to what?
Take a household with a $560,000 balance on a $600,000 line, $10,000 a month of take-home pay, $4,000 a month of spending on top of the mortgage, and a one-time $15,000 deposit. The loan terms come from the lender's own sample illustration. Interest is charged the way the product charges it, on the average daily balance, so pay that sits on the line until it's spent saves interest.
Notice the budget first. On a 30-year fixed, this household pays $3,540 to the mortgage, spends $4,000, and has about $2,460 a month left over. Most people send a little of that to principal and keep the rest in savings. Here that's $500 to principal and about $1,960 to savings.
The Optimizer pays off in 10.8 years, about 10.7 years sooner than the fixed with $500 a month extra, with $251,701 less interest. And it doesn't give up access to do it: in year 5 this household can still reach $259,045 of paid-down line, against $144,072 sitting in savings on the fixed.
Why it wins here: on the fixed, most of the leftover sits in savings earning a savings rate while the mortgage charges more. On the Optimizer every leftover dollar works against the loan balance and stays reachable. The line's rate runs above the fixed, and a big enough leftover covers that premium.
It doesn't win for everyone. Raise spending to $6,000 in the calculator and the leftover drops to about $460. The Optimizer slows to about 22 years and the fixed with $500 extra finishes first. Whether it works for you comes down to one trade:
Idle cash × (loan rate − savings rate)
has to beat
Your whole balance × the extra rate on the line, plus anything the open line gets spent on
Big idle balances and a small rate gap: the sweep can win. Thin leftover and a wide rate gap: the fixed wins. The calculator below runs that trade on your numbers, month by month.
Sweep vs a 30-year fixed, on your money.
It starts on the example household with $500 a month extra on the fixed. Change the paycheck, spending, rates and extra payment to yours, and add any big expenses you can see coming.
What you owe, year by year
Interest is charged on the average daily balance: each paycheck lowers the balance on its payday, spending draws it back up through the month (or all at once on the last day, if you put spending on a card and pay it at month end), and each day's balance is charged the rate over 365. The line is open in full for 10 years, then steps down 1/240th a month to $0 at year 30. Money you can reach is savings on the fixed, and on the sweep, the paid-down line you can draw plus any cash past payoff. Net worth is cash minus what you owe; your home's value is the same in every option, so it is left out. Hypothetical illustration, not a quote or an offer of credit.
Engine: Mortgage Clarity
Built for some households. A trap for others.
It tends to fit if
- You carry a large cash balance that mostly sits there.
- Income comes in lumps: bonuses, commissions, RSU sales, a business owner's draws.
- You have a steady leftover every month, after every bill.
- You want paid-down equity to stay reachable without applying for a new loan.
- You can live with a payment and rate that move.
Skip it if
- Your leftover each month is thin or unpredictable.
- An open line of credit on your house would get spent.
- You'd prepay a fixed loan anyway and want the rate locked for 30 years.
- Your budget can't absorb a higher rate if SOFR rises.
- You plan to sell or refinance in the next few years.
What the brochure won't lead with.
The rate moves on your whole balance.
It's an index plus a margin, adjusting monthly. Run the calculator at +1% and +2% from year 2 and look at the year 10 line before you decide.
The line shrinks after year 10.
For 10 years you can draw up to the full line. After that the limit steps down every month to $0 at year 30. If your balance hasn't kept pace, the required paydown rises.
Your debit card draws on your house.
Every purchase raises the balance you pay interest on. That's the point when you're disciplined and the danger when you're not.
Lines can be frozen or reduced.
Like any HELOC, the lender can freeze or lower the line in limited cases, such as a significant drop in your home's value. Keep an emergency fund outside the account.
It's a full first mortgage.
That means an application, underwriting, an appraisal and closing costs, the same as any refinance or purchase loan. Those costs belong in the comparison.
Three steps, your real numbers.
A 30-minute Clarity Call
Pay schedule, spending, cash on hand, plans for the next 10 years. The inputs that decide this.
The side-by-side, with today's actual pricing
I build your fixed loan and the Home Equity Optimizer next to each other, with real closing costs, and you get the same comparison you see above in your own client workspace. You can change the numbers yourself.
You decide, with the benchmark in view
If the fixed with extra payments wins, I'll tell you. Plenty of people should take the fixed.
The questions I get first.
Is this a second mortgage?
No. It's a first lien. It replaces your mortgage instead of sitting behind it.
Do I have to move my paycheck?
That's how it works best. Every deposit that lands on the balance cuts interest from that month forward. Pay that goes to another bank first does nothing for you until it's moved.
Is my money stuck?
No. During the first 10 years you can draw anything you've paid down, up to your line, with the debit card, checks, bill pay or a transfer. After year 10 the line steps down, so the amount you can reach shrinks with it.
What about taxes and insurance?
You still pay them. In the calculator they belong in monthly spending, the same on both sides, so the comparison stays fair.
Can it beat a fixed loan?
Yes, when a big idle balance and a small rate gap are working for you. Run the calculator with your real cash on hand in "Savings you'd park" and compare the net worth rows.
Find out if you're the household this was built for.
30 minutes. I'll run your pay, spending and cash against today's pricing, and I'll show you the fixed-loan benchmark either way.
Christian Kosko | NMLS# 1415795 | Fairway Independent Mortgage Corporation
NMLS# 2289 | Equal Housing Lender | Licensed in DC, MD, VA
The Home Equity Optimizer is a variable-rate, first-lien home equity line of credit. The rate is based on an index (30-day SOFR) plus a margin and can change monthly. The line may be drawn for 10 years, after which the credit limit decreases monthly to $0 at year 30. Property insurance is required. All figures on this page are hypothetical illustrations, based on a lender sample scenario and user inputs, and are not a quote, a rate lock, or an offer of credit. Actual rates, fees, and terms depend on credit, property, occupancy, and program guidelines in effect when you apply. Interest on a line of credit may not be tax deductible; consult a tax advisor. All loans subject to underwriting approval. This page is for educational purposes only.