No. of Recommendations: 8
Can I get anyone to at least agree that a HEL would accelerate the process much faster than BTs from a strictly mathematical standpoint and that there are no other financial down-sides other than those listed?

If:
1. The HEL rate is lower than the BT rates
2. There are no costs associated with the HEL (including costs rolled into the loan)
3. The snowball is kept at the same level

then an HEL can provide more benefit from a purely mathematical standpoint than BTs.

Those are 3 big IFs, though.

For #1 - you are getting BT offers at around 5% - 6%, right? That's lower than any 2nd or 3rd rate you would probably get.

For #2 - there are always cost associated with a new real estate loan. Sometimes the bank will say they will eat them, but usually, it means that they will absorb some/all of the costs, but give you a rate that's higher than they would have if they hadn't absorbed the costs. Or they will tell you it's a 'no-cost' loan, but when you get the loan, instead of the $40k you planned on borrowing, it's $46k - and the $6k is the costs that were rolled into the loan.

For #3 - you have already indicated that My not so detailed or well thought out plan is to increase the monthly budget by about 10% when we are debt-free and simply re-allocate all cc payments towards savings and investments - when you say 'debt-free' and then you indicate 'cc payments', it appears as though you are not going to consider the new HEL as part of your consumer debt that needs to be paid off with the snowball. For that reason alone, this sounds like a bad plan to me.

AJ
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