Run the blended rate before you touch that 4% first mortgage, because combining everything at about 6.5% moves you backwards. You owe $245,000 at 4% and $68,000 at 12%, so the HELOC is only about a fifth of your total debt. Blended together, your effective rate across both loans works out to roughly 5.7%. Refinancing the whole thing at about 6.5% (your example number) trades a 5.7% blend for a 6.5% loan, a step in the wrong direction. So a full combine-everything refinance probably doesn't make sense. The actual problem is the 12% HELOC, which is unusually expensive. The fix: leave the 4% first mortgage completely alone and refinance only the HELOC. With decent credit and some equity, a new second lien or replacement HELOC should price well below 12%, and local banks and credit unions frequently offer these with no closing costs. That knocks down the expensive piece without disturbing the cheap one. The blended-rate math, and never the headline first-mortgage rate alone, is what tells you the right move, and in your case it points to refinancing the HELOC by itself. Happy to help you compare a few second-lien options if you want.