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Velocity Banking Calculator

HELOC chunking vs straight extra mortgage payments.

Enter your values

ⓘ Live results

Results
Payoff with surplus
171 months (14.3 yrs)
Payoff without
361 months (30.1 yrs)
Interest saved
$222,056.75
Months saved
190
HELOC interest per chunk
$468.75
Verdict
The surplus does the work — the HELOC adds cost, not savings

Working

  1. 1Each $10,000.00 chunk takes 12.5 months to repay from surplus.
  2. 2Velocity banking only wins if the HELOC rate is below the mortgage rate.

Quick answer

Velocity banking uses a HELOC to make lump-sum mortgage payments; the savings come almost entirely from the extra cash you apply, not the HELOC itself.

compare amortisation with and without extra payments

How to use the Velocity Banking Calculator

  1. 1Enter your mortgage balance, rate and payment.
  2. 2Enter the HELOC rate and the chunk size you'd draw.
  3. 3Enter the monthly cash surplus that repays the chunk.

Worked example

Using the values the calculator loads with:

Inputs

  • Mortgage balance300000 $
  • Mortgage rate6.5 %
  • Monthly payment1896 $
  • HELOC rate9 %
  • Chunk size10000 $
  • Monthly cash surplus800 $

Results

  • Payoff with surplus171 months (14.3 yrs)
  • Payoff without361 months (30.1 yrs)
  • Interest saved$222,056.75
  • Months saved190
  • HELOC interest per chunk$468.75
  • VerdictThe surplus does the work — the HELOC adds cost, not savings
  1. Each $10,000.00 chunk takes 12.5 months to repay from surplus.
  2. Velocity banking only wins if the HELOC rate is below the mortgage rate.

Frequently asked questions

Does velocity banking actually work?

The payoff acceleration comes from your surplus cash. With a HELOC rate above your mortgage rate, the strategy costs more than paying extra directly.

When is a HELOC chunk worthwhile?

Only when the HELOC rate is meaningfully lower than the mortgage rate and you repay the draw quickly.

About this calculator

Results are estimates for general information. For medical, legal, structural or financial decisions, confirm with a qualified professional.