Rate Lock Fuels HEI Competition
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Rate lock has changed home equity from a refinance problem into a second lien or equity sale problem, which broadens the set of products Figure must beat. Homeowners with a 2% to 4% first mortgage often do not want to touch that loan, so the real choice becomes a HELOC with monthly payments, or an HEI that gives cash today in exchange for future home appreciation. Figure wins on speed and lower long term cost, but HEIs win when payment flexibility matters most.
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Figure is built for the payment bearing side of this market. Its product gives homeowners $15,000 to $750,000 through a digital HELOC, with approval in minutes, funding in days, and revenue from origination fees, servicing, and infrastructure. That makes HEIs a substitute at the consumer decision point, even though the legal structure is different.
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The lock in effect is large enough to support both categories. Mortgage Bankers Association data described home equity lending as a product of choice because many owners are sitting on low rate first mortgages, while ATTOM found HELOCs reached 18.2% share of originations in Q1 2025. At the same time, Point completed a $141 million HEI securitization, showing institutional demand for the asset class.
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The practical tradeoff is simple. A Figure HELOC adds a new monthly payment but usually costs less over time. An HEI avoids monthly payments, which helps cash constrained borrowers, but the homeowner gives up part of future upside when the home is sold or bought back. That means HEIs often pull in borrowers Figure cannot easily convert on rate or speed alone.
The next phase is a segmentation battle, not just a growth battle. Figure is pushing deeper into embedded HELOC distribution and cash out refi replacement, which should strengthen its hold on borrowers who want low all in cost and fast funding. HEI providers will keep growing with borrowers who value no monthly payment more than long term economics.