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You know, for a Pr(Eng); CA(SA); I can sound pretty dumb at times. Like when a client recently asked me if I was familiar with Velocity Banking. Nope, never heard of it!

So he then went to some lengths to explain this miraculous method of paying off your mortgage bond in no time flat.

Um, surely all you’re saying is that if you put all of your excess income over expenditure towards your bond, then, because that extra reduces the capital, it also reduces the interest and the interest on the interest?

Yes, well, if you put it like that, I guess it’s not magic, just common sense.

This reminded me of when I was bankrupt. My then girlfriend (later to become my second wife) had recently divorced and acquired the family home along with the outstanding bond. Between us, we set a goal of paying off the bond as quickly as possible.

I set up an amortisation graph that looked something like this, showing full settlement after 59 months at R2 000 per month –

Then, whenever we had spare cash, we went to the ATM and deposited it against the bond. After 7 months and having paid in R5 800 extra, the graph would look like this, with settlement time down from 59 to 55 months. The R5 800 would grow to R10 000 due to the saving of interest and interest on interest –

So yes, Velocity Banking is a great idea now that I know what it is!



  1. Your an idiot

    Dude you an idiot, that’s just 20% of the story, you need to go back and learn more about it

    1. I was unsure whether to trash this based on the fact that the email address is given as, but I decided that I simply had to respond, so that we could all have a smile about it.
      The first thing we notice is that this genius can’t spell: Your an idiot = You’re an idiot and Dude you an idiot = Dude, you’re an idiot.
      The next thing is that I belong to MENSA, so no doubt have an IQ that he/she would dearly love to have been blessed with.
      Then I am a Chartered Accountant (SA) and a Pr(Eng) – not bad for an idiot.
      And finally, when I re-read my article, it opens with the following –
      “You know, for a Pr(Eng); CA(SA), I can sound pretty dumb at times. Like when a client recently asked me if I was familiar with Velocity Banking. Nope, never heard of it!”
      So, thank you Mr/Mrs/Ms Test, I had to smile at your comment and hope that my other readers will too!

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