re: Any Velocity Banking advocates on here?

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Turning fully amortized interest to simple interest, even if the rate is a little higher

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This is what really drew a red flag for me from the advocates of this method, although I think they are probably just repeating what the advocates with $$$$ in this method had presented.

The problem with this is that it seems to be a bit sophistry. A typical mortgage, paid on time, is a simple interest loan. And like a HELOC, a credit card, is also a simple interest line of credit, even if the interest rate is outrageous. These advocates seem to conflate already confusing concepts and calculations like daily vs. monthly interest, fixed amortization payment schedule vs. non-fixed credit payment schedules, and principal compounding vs. interest compounding to make a mortgage seem like something it's not.

In other words, it uses "simple interest" as a nonsensical buzzwords, while leaving out the most important aspect of that simple interest: the interest rate.

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mortgages are one-way streets, were a LOC is revolving and you get that money back to put into another investment property once paid back

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Well this is true without this method, and in fact it's done all the time. A lower interest line of credit can be useful for a ton of reasons, so that's just an argument for taking out a HELOC, not using it for a specific purposes.

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-“chunk” payments chip away at the loan balance much more quickly than additional payments do, so each “normal” payment ends up going more towards principal, and therefore building equity much more quickly.

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And if one can afford to "chunk" the money to make an appreciable impact, then one wouldn't need to borrow money at a higher rate and pay it off quickly enough to do the same thing.

Here is an example.

Let's assume a family has a $250,000 30 year fixed mortgage with a 5% interest rate with the first payment due in January. This result in a monthly payment would be $1,342.05 or $16,104.06. And starting with the first payment they want to either "chunk" an extra annual payment of $16,104.06 towards the principal every January using a HELOC or just put $1,342.05 extra towards the principal every month.

The total cost of the mortgage using the "chunking" would be $312,381.50, and it would be paid off in 113 months, while the total cost of the mortgage with extra monthly payments would be $317,061.05 and it would be paid off in 119 months. So without even considering the interest on the HELOC and any tax implications, the chunking would result 6 months of fewer payments and save them $4,680 off their total mortgage, a little less than 1.5% total.

And if they were able to get their effective rate to be the same 5% as the mortgage with their HELOC every year (rates stay low; can keep enough money in account to minimize interest), pay it off in 11 months (equal payments before taking another one out the next year), they would pay roughly $4034 dollars in interest for each of those 10 times.

So with all of that extra work and extra risk, this method could save them roughly $646 or 0.2%.