Yes, you are the one!! I've reviewed the video numerous times -- all the details of the HELOC payments (in and out) are not fully explored; that is, you don't really see the precise cost of the interest charges for comparison purposes.

I think they are playing games with the time value of money, presenting the LOC monthly interest as miniscule compared to the gigantic interest associated with the mortgage but if you compounded everything out (using PV and FV functions, etc.), you would see a different picture. Again, the entire 10 years or so are not shown, making it harder to dissect the program. The video viewer is disencouraged from taking pencil (or pen) to paper; or presumably, keyboard to spreadsheet.

I guess the idea is that you are incurring a small interest charge that is calculated on a smaller balance to pay off a larger loan that is set for a 30 year time period. Once the first of the month passes, you (via your mortgage) will have to pay the entire month's interest whereas with the LOC you are just paying on the days you have a balance. But if you prepay the mortgage, you are "cancelling" the interest not because of timing but because you are lowering the loan balance.

I think you should consider the interest rate for the mortgage, the interest rate for the HELOC, and the time that you would hold the outstanding balance on the HELOC. Crunch the numbers and see what happens (or send them to me). If you are borrowing at a higher rate to pay off a lower rate, though, then it's unlikely to be beneficial.

Now, having a HELOC or LOC is not a bad idea to have in case of emergency or possibly, if you want to borrow at a lower rate to pay off a higher rate balance. (Some folks may call it robbing Peter to pay Paul or they may call it cash management).