If the faction troops were levies, you would get them for free and they would leave you again after a month or three. All current Silverstag troops are professionals.
The main difference in my opinion is that Mercenaries should come at a higher tier to begin with, but be unable to upgrade any further and have greatly increased upkeep costs for the privilege. They're units I would expect to want to purchase for short periods of time but dump again after a battle or two. Having them be negative stat troops that reduce battle loot might also be appropriate to somewhat simulate the effect of pillaging.
Also, for sake of discussion, even mercenaries were frequently "faction troops" somewhere. For example, German states more often had professional armies and in particular rulers of smaller and poorer states would themselves rent out army units for state revenue, a phenomenon which became popular in Germany and was termed Soldatenhandel. Its popularity rocketed during the long fighting of the Eighty Years' War which began in 1568 between the Dutch Republic and Spain and the Thirty Years War which originated in Germany, 1618, but spread throughout large parts of Europe. The Treaties of Westphalia legitimized the practice from that point on by recognizing the sovereignty of many lesser German princes who relied on the practice.
Hesse-Kassel in particular became known for doing this, as its state was especially poor and also developed a reputation for having a good military. (Somewhat analogous to the Varangians in this regard.) The practice was still highly popular as late as during the US war of independence, and in fact the Hessian mercenaries in this war were acquired through Soldatenhandel.