This paper presents a new velocity estimation strategy for a non-salient permanent magnet synchronous motor drive without high frequency signal injection or special PWM pattern. This approach is based on the d-axis current regulator output voltage of the drive system, which contains the rotor position error information. The rotor velocity can be estimated through a rotor position tracking PI controller that controls the position error at zero. For zero and low speed operation, the PI gain of the rotor position tracking controller has a variable structure according to the estimated rotor velocity. Then, at zero speed, the rotor position and velocity have sluggish dynamics because the varying gains are very low in this region. In order to boost the bandwidth of the PI controller during zero speed, the loop recovery technique is applied to the control system. The PI tuning formulas are also derived by analyzing this control system by frequency domain specifications such as phase margin and bandwidth assignment.