Most homeowners are used to the idea of paying off their mortgage over 30 years. It’s just the standard, right? But what if I told you there’s a way where you could pay off your mortgage in 5 to 7 years instead? That’s exactly what the HELOC strategy—also known as Velocity Banking—can help you do. In this blog, I’m going to break down how this method works, debunk some myths about low interest rates and inflation, and show you the real-life benefits.

Why Pay Off a Low-Interest Mortgage Early?
One of the most common questions I get is, “Why should I bother paying off my mortgage early if I’ve got a low interest rate, like 3%, and inflation is around 4-5%?” The logic makes sense on the surface—people think inflation will erode the real value of their mortgage payments over time, so why not let inflation do the work?

But here’s the thing—that approach is outdated, especially in today’s economy. It overlooks the way mortgage amortization works and how much interest you’re actually paying in the early years of your loan.

The Problem with Amortization
Most people don’t realize that a mortgage is front-loaded with interest payments. That means in the first 10-15 years of a 30-year mortgage, you’re mostly paying interest, not principal. You’re barely touching the actual debt during those early years.

And what happens next? Many homeowners decide to move or refinance before they ever get to the point where they’re making meaningful progress on the principal. This essentially resets the clock, throwing them back into another cycle of high interest payments.

The HELOC Strategy: How It Works
The HELOC strategy is designed to break you free from that endless interest cycle. Instead of sticking to the traditional mortgage payment schedule, you use a HELOC to pay down your mortgage principal faster. Here’s how it works:

Leverage Your HELOC: You take out a HELOC, which functions like a revolving line of credit, and use it to make a lump-sum payment toward your mortgage’s principal balance.

Manage Cash Flow: Instead of making regular mortgage payments, you focus on paying down the HELOC using your income. HELOC interest is calculated daily, so the faster you lower the balance, the less interest you pay.

Repeat the Process: Once the HELOC is paid down, you repeat the process—use the HELOC to make another big payment toward your mortgage, speeding up the payoff timeline.

Benefits of the HELOC Strategy
There are three key benefits that I’ve seen time and again with this strategy:

Faster Payoff: Instead of sticking to that 30-year plan, many homeowners using the HELOC strategy pay off their mortgage in as little as 5 to 7 years.

Flexibility: With traditional extra mortgage payments, your money is locked into your home equity. But with a HELOC, the funds are accessible if needed—for emergencies, investments, or any other reason.

Cost Savings: By reducing the principal faster, you save thousands in interest payments over the life of the loan. You’re cutting down the total amount of interest you’ll pay because you’re paying off the debt sooner.

Real-Life Example
Let me share a real-life example with you. During the COVID-19 pandemic, one of my clients—a schoolteacher—was furloughed for two months. She was able to use her HELOC to cover living expenses, which allowed her to avoid late payments and potential foreclosure. The flexibility of the HELOC strategy gave her the breathing room she needed until she could return to work. Without this option, her situation could have been a lot worse.

The Dangers of Constant Refinancing
A major mistake I see people make is refinancing their mortgage every few years. Sure, it might lower your monthly payment temporarily, but it also resets the amortization schedule. This means you’re back to paying mostly interest, and you’re stuck in a cycle where you’re never making serious progress on paying off the principal.

Refinancing is great for banks, but not so great for you if your goal is to own your home free and clear.

Why Inflation Doesn’t Help
Yes, inflation erodes the real value of future debt payments, but this doesn’t mean you’re off the hook. In the short term, you’re still dealing with the financial burden of high interest costs. Plus, inflation can fluctuate, and you may never see the long-term benefit if you’re stuck paying interest for decades.

The HELOC strategy allows you to take control of your debt, start reducing the principal faster, and break free from the cycle of never-ending interest payments.

Conclusion
Using a HELOC to accelerate your mortgage payoff is one of the most powerful strategies available to homeowners today. By focusing on reducing the principal early and leveraging flexible cash flow, you could pay off your home in as little as 5 to 7 years, saving yourself thousands in interest and gaining more financial freedom.

If you’re ready to explore how the HELOC strategy can help you, my book, Break Free from Your Mortgage, offers step-by-step guidance and even more insights into how you can take control of your financial future.
​