Yes the penalties are high, so if people think they might be selling when they renew their mortgage, they get an open rate mortgage that allows them to sell with less of a penalty than a closed rate mortgage. 

I will give you my numbers since we are 3 years into Velocity Banking.Home was purchased at $410k.Interest rate: 3.125%30 year termMortgage payment is around $1950 (includes insurance and property tax)HELOC: 8.25% Variable rate - current rateCredit Limit: $97kLet's say I made $10k a month and our expenses were $6k each month including the mortgage.

Imagine interest rates drop 2% or more in 2 years.

I have a contract on a house in Phoenix AZ with a value of $500,000 and a mortgage of $288,000 to be taken subto.

The "variables" you speak to could mean this is worth every cent of a 5.4% cap rate to "I wouldn't touch this for a 12 cap".  

Specifically, I am looking at partnering with an individual who owns securities (stock and mutual funds) having them take out a line of credit against their portfolio (SBLOC) at a low interest rate, and using that to purchase properties rather than using a mortgage.

Closest rate I've gotten to this was a 7.2%.Thanks for the help!

In 1972 the 30 year mortgage interest rate was 7%.

That being said, with interest rates being higher now, I may not be able to find a turnkey property that makes financial sense.  

It is a rare interest rate environment when you have a HELoC rate sufficiently lower than a fixed-rate mortgage (still likely not lower than a variable rate mortgage ... which are not available in the U.S.A.