Rental Property Investor · Melbourne, FL · Member since 2011 · 3k+ posts · 2k+ votes
4y
Dang, that's an expensive program! $1847 to learn how to pay off your house using a HELOC. It used to be called the chunk method, or similar. This is how I understand the process: Open a HELOC and use it as a checking account. Transfer $5000 from your mortgage to your HELOC, and use the HELOC as your checking account. Ensure you make more than you spend so your HELOC balance goes down each month. The amount of interest is calculated at a certain time of the month, and you want your paycheck filling up the HELOC balance at that time, so your payment is lowest. When the $5000 is paid back, do it again. Draw another $5000 from the HELOC and pay a chunk of your mortgage off.
Rental Property Investor · SE Michigan · Member since 2014 · 4k+ posts · 6k+ votes
4y
Why would you want to pay off a home mortgage?
Even today mortgage loans are very cheap money. You would be better off investing the cash into assets that produce more income than the savings you would get paying off your loan.
Seattle, WA · Member since 2022 · 1 post · 0 votes
4y
I just heard about this Shred Method and don't understand how it's different from just making extra payments to principal with your discretionay income. I can get much better returns with that money in other investments since I have a super low mortgage rate.
Does anyone have a better understanding of the Shred Method and how using a HELOC to pay off a primary mortgage makes sense?
Rental Property Investor · Melbourne, FL · Member since 2011 · 3k+ posts · 2k+ votes
4y
Dang, that's an expensive program! $1847 to learn how to pay off your house using a HELOC. It used to be called the chunk method, or similar. This is how I understand the process: Open a HELOC and use it as a checking account. Transfer $5000 from your mortgage to your HELOC, and use the HELOC as your checking account. Ensure you make more than you spend so your HELOC balance goes down each month. The amount of interest is calculated at a certain time of the month, and you want your paycheck filling up the HELOC balance at that time, so your payment is lowest. When the $5000 is paid back, do it again. Draw another $5000 from the HELOC and pay a chunk of your mortgage off.
Real Estate Consultant · Seattle, WA · Member since 2022 · 1k+ posts · 784 votes
4y
Spending $1,847 or whatever the number is increases your debt instead of paying it down. Take that $1,847 and send it to your mortgage company as an extra principal payment. Rinse and repeat the next time you decide to spend a few grand on someone telling you how to make mortgage payments
As of Jan. 2026, they charge $997 setup fee and $67/month to use their software. It is an investment in a specific strategy and the tool to manage it. User reviews suggest that the method and software do work for those who are disciplined and fit the ideal candidate profile.
However, the core principle is using a HELOC for interest rate arbitrage, a concept that can be replicated manually with sufficient financial knowledge and a spreadsheet, as some users point out. Ultimately, the software's value is in providing the specific calculations and step-by-step instructions that remove the guesswork, making it a system for those who need a clear, guided process.
It is not worth the price. Surprisingly all the alternatives
to The Shred Method are charging similar outrageous amount of money for
a simple strategy by packaging as a software to justify their pricing.
The simple secret is that HELOC interest is calculated on a daily basis on the outstanding amount. So open a
HELOC and deposit all your salary and income checks into HELOC account
and pay bills from that HELOC account. All bills are not paid at the
same time so the way math works is your total interest charged month to
month is lower than just paying bills from checking account. Start
knocking off credit card debt using Heloc account. Pay off higher interest account first. Also start paying off mortgage bi-weekly payment that will also reduce mortgage faster, it is a simple strategy that you are basically shredding INTEREST charges.
OPEN HELOC, deposit all salaries and income into that account, and pay bills from that HELOC account. if your bank allows SWEEP ACCOUNT then deposit income there that automatically moves all the money into HELOC account to pay bills so you don't have to remember moving money manually because even a day or two delay can cost you interest while that money is doing nothing in your CHECKING ACCOUNT. This is the main strategy of this method that works on math alone. NO SOFTWARE REQUIRED.
Change the mindset of paying bills from checking account to paying from HELOC account. Open HELOC while your credit is good, and use only money that you need it to pay off debt, otherwise it can put you in lot of debt. because HELOC has adjustable interest rates, generally prime plus 1%, currently HELOC rate is 7%.
Rental Property Investor · Melbourne, FL · Member since 2011 · 3k+ posts · 2k+ votes
8mo
I recently got a HELOC on my primary and they only send a few checks for me to use. But I can see how the payment is much lower than the interest rates on other debt such as credit cards and I see that my truck loan really sucks. It seems like a reasonable way to pay off my house (and truck) faster, and still have the LOC to use for buying houses. I was thinking to use all rents to pay down the line that much faster. Would make taxes a pain...
Real Estate Broker · Cedar Rapids, IA · Member since 2019 · 143 posts · 56 votes
6mo
I'm an active Shredder within Adam's community. The common misconception is shredding down your personal house, which makes sense as that's how he markets it. I sat in a short presentation where he spoke about it and I immediately started thinking about my investment properties. I have higher rates with my investment properties and my primary residence is at 2%, so it was a no brainer to start with my investment properties. It's important to remember that a mortgage rate (compound) is NOT the same as a simple interest rate. Lastly, I've found using my HELOC, instead of my cash, I'm able to leverage that amount of trapped equity to my gain. The method isn't for everyone, but I will say it's more than just "helping you pay your mortgage" it's an algorythm that assists you in your monthly payment schedule to ensure you are optimizing the HELOC, while paying the least amount of interest.