What Is Velocity Banking Strategy?

Want to pay off your mortgage fast? Velocity banking is a mortgage repayment “strategy” that’s growing in popularity. But does it actually work? We’re going to break down what velocity banking is, look at the pros and cons. But more importantly we’re going to look at who is making money off of this strategy.

Velocity Banking Summary

Overall Rating: 0 / 5
Best Feature: Your may save $40 on your mortgage
Biggest Con: Your debt goes up, pay more in interest, and have to jump through a ton of hoops to make a single mortgage payment.
Recommendation: Do NOT use this strategy, just pay off your mortgage like a normal person WITH YOUR OWN DAMN MONEY.

What Is The Velocity Banking Strategy?

The velocity banking strategy is when you pay off your mortgage quicker, using debt. In theory if you make a large payment on the principle of your mortgage you’ll save money by not paying the interest on your mortgage.

Velocity Banking Pros

  • You may be able to save $20 – $200 on your mortgage interest payments

Velocity Banking Cons

  • Can not pay a mortgage with debt
  • Have to use a 3rd party to do so
  • Have to pay a 3rd party extra fees
  • Have to use debt with a higher interest rate
  • You could easily just save actual cash and avoid using debt at all!
  • You risk a lot by putting large amounts on your credit card or line of credit
  • Your credit score will most likely drop
  • It’s a pain in the ass to actually set this up and monitor it
  • You STILL have to save whatever debt you use and pay it off ASAP!

Should You Use This Strategy?

Listen I’m all for paying off your mortgage faster and saving money on interest. But the velocity banking strategy is just plain stupid. It’s so stupid that yes I’m calling this entire strategy a SCAM.


Because the people who are pushing and advocating for velocity banking are the ones who own, or are paid by the 3rd party companies that make it possible to pay your mortgage with debt. And the craziest and stupidest part of this whole strategy is that you still have to quickly save the money you put down on your mortgage!

Let’s look at an example. I have a $100,000 left on my mortgage, and I want to make an extra payment of $10,000. Using the velocity banking method you would put that $10,000 on a credit card of line of credit. The 3rd party would then pay your mortgage using that money (minus their fee of course).

Congrats your mortgage is now $90,000 but you now have $10,000 in debt that you are getting charged MORE in interest! You now have to find or save $10,000 within 30 days and put that down on your debt in order to ACTUALLY save money on your mortgage.

Which is why I highly recommend the alternative method to paying your mortgage faster. It’s call save the damn money yourself, then pay it off with cold hard cash! The point is simple, with or without velocity banking you’ll have to come up with $10,000 in cash within 30 days. So why not wait the damn 30 days to get your money and avoid all the headaches and extra fees / risk that velocity banking has!

Remember money can be complex, but wealth is simple. So keep it simple stupid.

Velocity Banking FAQ’s

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