Comparing a Home Equity Line of Credit to a Mortgage as a strategy to pay down debt while utilizing the simple interest of a HELOC compared to the compounding interest of a mortgage.
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Does it make sense to transfer a sum of money from the HELOC to the mortgage as lump sum payment and how much does it save over time? There is a lot of speculation on this topic but today I show you how I broke down the numbers to actually determine if the strategy will save money over the long term. Comparing simple interest to compound interest is a complex strategy and is not easily determined. This spreadsheet helps estimate the potential cost reward benefit of making extra payments to reduce the interest portion of a mortgage. Many scenarios will benefit from using a HELOC without making extra payments but still saving money over time.

To use the chart simply enter the mortgage and HELOC information and the amount of the transfer. The payments are calculated automatically and we can now can see how much interest will be paid on the mortgage from now until the balance reaches zero.

The spreadsheet has 2 sheets:
Quick Calculator - Compares equal payments to either a mortgage only or to combined debt mortgage/HELOC scenario to determine which one would out perform in terms of interest savings.
Custom - Daily tracking spreadsheet that calculates interest savings utilizing a HELOC as a bank account to help keep the debt as low as possible while still continuing to make mortgage payments.

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My primary investment strategy is long term high yield dividend investing. I have been an actively trading the stock market for over 20 years and have built most of my wealth by reinvesting my dividends and following my 14 Personal Rules of investing. I actively trade options on both the American and Canadian Stock exchanges using options strategies and buying and holding high yield dividend paying stocks.

I generate monthly income in two ways. Averaging more than an annual 7% return by collecting dividends on high yield dividend stocks that I hold. The second income stream comes from the selling of option premium and taking advantage of theta decay. This neutral strategy allows me to make money in both bull and bear markets and limits my risk. Both of these strategies are suitable for passive income and create a stable predictable safe passive monthly income.

Want to learn how to trade stocks and make more money? This channel is dedicated to increasing investment returns and building wealth by passively trading in the stock market. If you’re tired of poor performance then make sure you subscribe to Drawbridge Finance [ Ссылка ] I produce weekly videos for the beginner trader and use simple explanations to learn how to buy and sell stocks for profit.

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Levi Woods

Disclaimer: I am not a financial planner and am not offering investment advice. This is an opinion channel only and should not be taken as any form of financial advice. I receive a small commission from the purchase of any item from using the links listed above. There are financial risks involved in taking on any monetary transaction that I discuss in my videos.

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