I mailed in a request a few weeks back for Wise Bread to do a post on mortgage accelerators, and if this is in response to that I greatly appreciate it.

It seems to me however that your analysis isn't 100% right. Let's look at a situation where you make no additional principal payments and you spend every cent you make. If your bank account and mortgage are merged, the time between when you receive your paycheck and you spend your paycheck can be used to temporarily lower your principal. This results in a reduction of interest paid.

Now the $3500 fee could very well negate all the interest savings, but what if you opened a HELOC yourself? Say you normally keep $5k in your checking account. You open a HELOC and immediately transfer $5k to your mortgage along with the $5k in your checking account. Now although your interest rate on your HELOC is higher than your mortgage, you direct deposit your paychecks into your HELOC and pay your bills out of it. The HELOC then acts as your "money merge account" without you having to refinance your original mortgage. Your optimal gain is when you keep your HELOC at as close to 0 as possible.

I'm not sure what the costs are in setting up a HELOC, but you also have the benefit of an emergency fund. Rather than keep cash sitting around in case of an emergency, you use it to pay down your mortgage. Should an emergency arise, you already have the HELOC set up to cover you.

My math is a little fuzzy right now but I think it could certainly help, although not to the degree MMA claims since you're not paying off $1k extra in principal each month.