What Is Velocity Banking?

A "For Sale" sign is posted in front of a home in San Anselmo, Calif., on March 22, 2023. Justin Sullivan/Getty Images

Velocity banking is all over the internet. And self-proclaimed financial experts on YouTube are touting its benefits. It’s a way to use a home equity line of credit (HELOC) to pay off your mortgage early. On paper, it looks great.

But is it as great as some say? Can you really pay off your 30-year mortgage in under 10 years, as others claim? Here are the benefits and consequences of velocity banking.

Velocity Banking and HELOC

Velocity banking, also called the HELOC strategy, is where you use a line of credit as your primary account and use monies in this account to make lump sums toward a loan, usually a mortgage. Most velocity strategies use a HELOC.