Replace Your Mortgage with a heloc
San Antonio, TX · Member since 2017 · 2 posts · 1 vote
Replace Your Mortgage with a heloc
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Ashish AcharyaBusiness Member
CPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votesHELOC interest will generally higher than your mortgage. Would you refinance your current loan with a higher interest loan?
Someone asked the same question before. Rather than taking out HELCO at higher interest and paying off the mortgage, and then paying off the HELOC in 5/7 years, why dont you pay off your mortgage in 5/7 years? You would pay less interest for 5/7 years on your original loan rather than HELCO. And there are other costs associated with HELOC.
HELOC should be used if you are going to earn more return on your loan than you are paying in the interest.
Hope that makes sense.
INVESTOR FRIENDLY CPA®5241 Reviews
12 Replies
- 8yAshish AcharyaBusiness MemberCPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
HELOC interest will generally higher than your mortgage. Would you refinance your current loan with a higher interest loan?
Someone asked the same question before. Rather than taking out HELCO at higher interest and paying off the mortgage, and then paying off the HELOC in 5/7 years, why dont you pay off your mortgage in 5/7 years? You would pay less interest for 5/7 years on your original loan rather than HELCO. And there are other costs associated with HELOC.
HELOC should be used if you are going to earn more return on your loan than you are paying in the interest.
Hope that makes sense.
INVESTOR FRIENDLY CPA®5241 Reviews - San Antonio, TX · Member since 2017 · 2 posts · 1 vote8y
Hello,
My loan is 6.75, The Heloc is 3.99. You maybe right, Ill try to figure it out, Thanks
- Investor · Austin, TX · Member since 2016 · 19 posts · 14 votes8y
I did that and it works great for me. There is a strategy, requiring self discipline, you need to use to make it work but it works great.
PM me and we can jump on a call where I would be happy to share the logic.
- Lender · Phoenix, AZ · Member since 2018 · 440 posts · 256 votes5y
Unfortunately, Texas has some Heloc restrictions that make this loan not make quite as much sense. However, in the other 49 states, and the other countries that have been using Offset mortgages for decades it's an incredible tool!
3 Reasons this can't be replicated making extra payments on a traditional 30 Year Fixed:
1. Even with paying extra every month, your payment the next month never gets cheaper. (No Snowball Effect)
2. You can't be as aggressive, because you don't have access to those extra payments without selling/ReFi
3. You're still paying interest first to the bank based on the Amm. schedule.
The opposite of those 3 are true with Offset mortgages. For those who qualify, it's an incredible personal finance tool, and investment finance option. - Lender · dfw, TX · Member since 2016 · 88 posts · 48 votes5y
Justin Is correct about Texas - we have some odd stuff here. But be careful of the introductory rates and variable rates on the HELOCS. What makes sense today may be a terrible decision tomorrow. Be certain you understand the terms of the HELOC.
- Lender · Phoenix, AZ · Member since 2018 · 440 posts · 256 votes5y
To Trevor's point, it's really not for everyone. If someone is living paycheck to paycheck, or doesn't have any reserves, it won't work. It's really just for those that are good with money, and live on less than they make.
For qualified candidates, the interest rate really doesn't matter. When you're paying off in 5 years without changing spending habits, it's really not an interest rate sensitive loan. It's more a function of interest cost that you'll want to look at, and how much interest is saved in that timeline. For anyone who qualifies, the math works at today's low rates and the lifetime cap rate as well. - Member since 2026 · 3 posts · 0 votes6mo
What began as a simple curiosity turned into something much deeper—more like pulling on a loose thread and watching an entire tapestry unravel.
It started with two names: Michael Lush and David Dutton. Back in 2012, they stumbled into what was then known as the “Accelerated Mortgage” concept. At first glance, it looked like just another financial strategy floating around the edges of personal finance circles. But a few years later, they re-emerged with a polished brand—Replace Your Mortgage—positioning themselves as pioneers of something that, as it turns out, had a much longer and more intricate origin story.
And that’s where things took an unexpected turn.
According to what I uncovered, David Dutton didn't simply "discover" the model. Instead, he reportedly approached Truth In Equity—the original architects behind the concept—under the guise of a prospective client. Over the course of nearly two years, he immersed himself in their ecosystem, asking questions, observing processes, and gathering insight. By the time he stepped away, he wasn't just informed—he was equipped. What followed was the launch of a competing model built on the same foundational mechanics: equity optimization through a First Lien HELOC structure.
But to really understand this story, you have to go back further—well before 2012, before the branding, before the imitators—back to the early 2000s.
Around that time, a man named Bill Westrom, working as an AE at Macquarie Mortgage, built something that would quietly change everything: a calculator. Not just any calculator, but one designed to demonstrate how a product called the “Asset Manager” could outperform the traditional 30-year mortgage—not marginally, but dramatically. Four times faster amortization, regardless of fluctuating interest rates.
It was brilliant. Elegant, even.
But it was also ahead of its time.
Bill’s intention was simple: show CPAs and financial planners that there was a better way. But the early 2000s housing market was roaring, and few were interested in rethinking a system that seemed to be working—at least on the surface. Sales lagged. Resistance was high. And when Bill proposed a shift in strategy—moving from broker-driven distribution to a direct-to-consumer model—his ideas were dismissed.
“What else you got?” they asked.
That question, as it turns out, was the end of one chapter and the beginning of another.
Not long after, Bill crossed paths with David Welles, a mortgage broker with a sharp technical mind. As Bill later recalled, there was an immediate sense of alignment—one of those rare professional moments where two people recognize they’re thinking the same thoughts at the same time.
Their conversations spilled beyond boardrooms and into parking lots, where they spoke candidly about what they saw coming: a housing market built on fragile lending practices, a system edging toward collapse, and a public largely unaware of the risks.
In 2006, they decided to act.
Together, they formed IFS Development Group, the precursor to Truth In Equity. By September of that year, they began bringing the Asset Manager concept directly to consumers. And the response? Immediate. Thousands of clients adopted the model, drawn by a simple but powerful premise: “If people only knew.”
Then came 2008.
The 2008 Financial Crisis didn’t just shake the housing market—it shattered it. Institutions collapsed, including Lehman Brothers, and the traditional mortgage system showed its cracks in real time. Yet, amid the chaos, something remarkable happened: the clients using this alternative model didn’t experience the same level of devastation.
Why?
Because Bill and David had already begun evolving the concept. They took the original Asset Manager framework and re-engineered it—adding layers of resilience, flexibility, and control. What started as a loan product became a broader financial system centered around cash flow efficiency.
But even that evolution faced a major setback.
As the crisis peaked, Macquarie exited the U.S. market, leaving dozens of high-quality loans in limbo. Bill and David scrambled, approaching nearly every major bank you can think of—searching not just for a lender, but for a partner capable of supporting their methodology.
Eventually, they landed at U.S. Bank, where a senior executive, Anthony McGill, immediately recognized the strength of the loan profiles. But just as quickly as things began moving forward, everything came to a halt.
Enter John Dugan.
From his vantage point at the Office of the Comptroller of the Currency, the sudden surge of pristine borrowers applying for First Lien HELOCs during a financial collapse didn’t make sense. In fact, it raised red flags—serious ones. The lending channel was frozen, pending investigation.
What followed was a pivotal moment.
On a conference call that could have gone either way, David Welles walked through the mechanics—methodically, precisely—explaining how the system worked, why it reduced risk, and how it aligned borrower behavior with sound financial principles. By the end of the call, the skepticism had turned into something else entirely.
“This is the most brilliant thing I’ve ever seen,” Dugan reportedly said.
The freeze was lifted.
But the experience left an imprint. It forced Bill and David to think even bigger. They realized that while the First Lien HELOC was powerful, it wasn't always accessible—especially in a post-crisis world where many borrowers no longer qualified.
So they adapted again.
Instead of requiring people to refinance, they developed methods that allowed homeowners to optimize what they already had. No replacement necessary. Just better use of cash flow.
Around this time, another unexpected catalyst entered the story: Jordan Goodman, widely known as “The Money Answers Man.” After a chance exchange, he traveled to meet Bill and David in person. What he found compelled him to share their work across media platforms, including appearances connected to Fox & Friends. This is the interview that set things on fire
The exposure was explosive.
Traffic surged so dramatically that even their hosting provider struggled to keep up. The concept had officially broken into the mainstream.
And that brings us full circle—back to the emergence of competitors like Replace Your Mortgage.
By then, the groundwork had been laid. The ideas were out there. But as with many innovations, not everyone grasped the full depth of what had been built. Some focused on the visible mechanics—the “how.” Others, like Truth In Equity, continued refining the underlying system—the “why.”
As Bill once put it, “Every borrower’s financial life is as unique as a fingerprint.”
And that distinction matters.
Because while many can replicate the appearance of a strategy, far fewer understand the architecture beneath it—the interplay between cash flow, debt structure, and behavioral finance that makes the system actually work.
I’ll be honest—this wasn’t just an intellectual exercise for me.
I came into this as a skeptic. A cynic, even. The kind of person who assumes there’s always a catch, always something hidden beneath the surface. It took me four years to fully engage, and during that time I did everything I could to disprove it—to find the flaw, expose the weakness, justify walking away.
I never found it.
What I found instead was a level of precision, transparency, and genuine care that’s rare in any industry—let alone financial services. The math held up. The strategy worked. And more importantly, the people behind it stood behind what they built.
I’ve seen what this system can do—not in theory, but in practice. Debt eliminated. Time compressed. Financial pressure lifted.
And perhaps most importantly, clarity restored.
Because at the end of the day, this isn’t just about mortgages or banking strategies. It’s about understanding how money moves—and learning how to make it move in your favor.
Or, as Bill said in a moment that stuck with me:
“Help people get more out of what they own and what they earn—and you’re not just feeding them. You’re teaching them how to fish.”
That, more than anything, is the difference.
- Investor · Houston, TX · Member since 2019 · 95 posts · 29 votes5mo
The HELOC mortgage swap can work, but most people I see do it wrong.
Here's the math nobody walks you through.
A regular mortgage charges interest on the WHOLE balance every month for 30 years.
A HELOC charges interest only on what you've actually pulled out.
So if you sweep your paycheck through the HELOC, your average balance drops every month.
Less average balance means less interest paid means faster payoff.
That's the win.
Here's where it goes sideways.
The HELOC rate isn't fixed. If rates jump, your payment jumps with them.
And if you treat credit lines like free money, this strategy turns your house into a credit card.
The math works for disciplined people with steady income and a written rule for when to draw.
Run your own numbers before you replace a 30-year fixed at 3%. That's hard math to beat. I prefer the Whole life cash value strategy if your going to do something like this. Both needs to be automated for it to work properly. Both Not for everyone.
- Member since 2026 · 3 posts · 3 votes5mo
Heloc is 3.99 ? Heloc's prime rate is 6.75% now
- Rental Property Investor · WI · Member since 2023 · 192 posts · 144 votes3mo
I am going to try and do exactly what your stating but my use case might be different. I am working to aggressively pay off my mortgages to get a debt free portfolio. I have 6 properties to pay off over the next 5 years. My HELOC has a rate of 7% and some of my mortgages have a rate of 6.875%. Yes my HELOC is at a higher rate but if I can use it to pay off a property I unlock the increased cashflow of a paid off property earlier and then I can use that capital to pay the HELOC back sooner than I could waiting to pay the property off in full without using the HELOC.
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