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Does that sounds "foolish"?

Sounds fine to me, but I don't see a big dollar savings.

Low cost HELOC's are in the 4% to 4.5% range now (I think). And I think the best savings rates (at something like ING) are about 2%. So you're looking at something like a 2.5% difference in rates.

If your property taxes aren't all that large - around $3k - the most you'd save would be $75 if the money was set aside all year. If you put aside 1/12 of the taxes each month, the savings would be roughly half that, or $38.

But changing the assumptions could change your outcome quite a bit. Take the HELOC to 5.5%, the savings rate to .25% and the property taxes to $6k and the savings comes out to $315.

If there are any fees associated with taking a draw on the HELOC, they could quickly eat up the savings.

Arbitrage works, but it's usually a small margin, large dollar volume game.

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