Real Buyer– Another way to think about it is this:

One might infer from your example that it seems like the higher the interest rate of the HELOC, the better your return. I mean why not shoot for a 12% HELOC and get $10 a month!

Of course, as you so rightly mentioned, the higher interest is actually a deal killer. It could possibly work if the margins worked out just right, but I suspect for most consumers, they would simply never pay off this HELOC. How cool is that!