Consolidating Debt With Your Mortgage
Use your home's equity to turn high-interest debt into one lower payment.
The quick version
If you own a home, you may be able to use your equity to pay off high-interest debt.
Mortgage interest is usually much lower than credit cards or personal loans.
You can usually borrow up to 80% of your home's value in total.
The result: one payment, often much lower than what you pay today.
The key is a plan, so the debt does not come back.
Feeling stretched by monthly payments? Book a confidential call and let us look at your options.
How it works
Debt consolidation means combining your consumer debts into a mortgage secured by your home. Because the lender has your home as security, the interest rate is usually much lower than unsecured debt.
Debts you can often consolidate:
Credit cards
Unsecured lines of credit
Car loans
Student loans
Personal and payday loans
Your options
Refinance: replace your current mortgage with a bigger one, up to 80% of your home's value. You will need to qualify, and there may be a penalty to break your current mortgage.
Home equity line of credit (HELOC): a flexible line of credit secured by your home.
Second mortgage: a separate loan behind your first mortgage. Useful when breaking your current mortgage would be too costly, but usually at a higher rate.
The right choice depends on your current mortgage, your penalty and your goals. I will compare them side by side for you. Good to know: most lenders will not pay out taxes owing to the CRA through a refinance. They usually need proof that your taxes for the previous year are paid.
Pay it off faster
Many mortgages let you make extra payments without a penalty, like increasing your payment or making a lump-sum payment each year. Extra payments go straight to your principal.
Tip: once your debts are consolidated, keep paying some of what you used to put toward them. You will be debt-free much sooner.
Our simple plan
Review your debts and income together
Confirm your home's value and equity
Compare your mortgage options and costs
Consolidate and build a written plan to stay on track
Let us lighten the load
There is no judgment here. Life happens, and the right plan can make a huge difference. Book a call anytime.
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