Several debts priced above your mortgage can become one repayment, if it is set up properly.
Refinancing for debt consolidation rolls credit cards and personal or car loans into your home loan, swapping high rates for the mortgage rate and one repayment, which usually cuts the monthly cost.
The risk is stretching a five-year debt over thirty years, which can cost more in total. Keeping the consolidated amount in its own split, repaid on a short term, avoids that.
Part of the refinancing guide.
Here is the part the glossy versions of this page omit: a mortgage rate is lower per year, but a mortgage runs for decades.
Yours could be the next one.
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Example rates only, not current advertised rates. Set both sliders to your own figures.
Over the remaining term, before switching costs and fees, we model those before recommending a move. Estimates only, not credit advice.
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Charles and the team recently assisted me with the refinance of my investment property.
Charles at Links Property Finance made buying our first home so much easier than we expected. As first home buyers, we had a lot of questions around borrowing capacity, our deposit and the different government schemes available to us. Charles explained everything clearly, compared different lenders and kept us updated throughout the whole process. He was always easy to reach and made sure we understood what was happening from pre approval right through to getting our home loan approved. We would definitely recommend Links Property Finance to anyone looking for a mortgage broker, especially first home buyers who want someone to guide them through the process.
I have had a number of dealings with Charles from Links Property Finance. He is very knowledgeable, thorough, and detailed with his advice. Importantly, he is very approachable and easy to deal with. His advice has been beneficial to myself and my acquaintances. I highly recommend him.
Charles Touma, Mortgage Broker.
The fix is simple and almost never advertised: keep paying the consolidated portion at the old pace. The debts die on something like their original schedule, at the lower rate, and the mortgage doesn't absorb them into its decades.
Direct the repayments you were already making, the card payment, the car payment, into the mortgage as extra repayments, or structure the consolidated slice as a separate split with its own shorter term.
When high-rate debts are straining an otherwise sound budget. When repayment clutter is causing missed payments that damage your credit file. When a single lender assessment beats juggling five.
When it's paired with a refinance that was worth doing anyway, one application, one settlement, a cleaner position and often a sharper rate at the same time.
Everything on this page comes down to which of these columns you end up in, and that's decided by structure and habit, not by the loan.
The lower rate does its work because the term never stretched.
Feels cheaper every month while quietly costing more overall.
Consolidation clears the cards; it doesn't change what filled them. If spending continues at the old pattern, the cards refill on top of the enlarged mortgage, and the position eighteen months later is worse than the starting one, now with the debt secured against your home.
That last clause deserves weight: unsecured debt becomes secured debt. A card company can chase you; a mortgagee can sell the house. Consolidation converts nuisance into stakes.
It also isn't a tool for a budget that's already failing. If repayments are being missed and the direction is downward, adding debt to the home is the wrong instrument, a financial counsellor is the right first call, and the National Debt Helpline (1800 007 007) is free.
We say this on the record because a broker who'd rather write a loan than say it is one of the red flags on our choosing a broker page.
Commonly credit cards, personal loans and car loans; some lenders will include tax debt or buy-now-pay-later balances, with policies varying widely. Each debt appears on the application with a payout figure, and the lender confirms the debts are closed at settlement, not just paid down and left open.
Briefly, through the application’s enquiry, but it often helps over time: fewer accounts, no juggled due dates and a cleaner repayment history. Close the paid-out cards, because open cards still count their limits against your borrowing power.
The enlarged loan generally needs to stay within 80% of your property's lender-assessed value to avoid lenders mortgage insurance, so the room available is 80% of value, minus your current balance.
Serviceability is assessed alongside: the lender must be satisfied your income carries the new total at a buffered rate.
Sometimes: arrears narrow the field but do not always close it. Some lenders consider a consolidation that clearly improves your position, and specialist lenders exist for harder files.
Be clear with yourself about direction first: if the budget doesn't work even after consolidation, a financial counsellor is the right call before any application, and we'll say so if that's what your numbers show.
Just refinance, if your other debts are small and well managed: consolidation is the same transaction with other debts cleared, which suits larger or costly debts.
If they're expensive and cluttering the budget, folding them in while you're refinancing anyway costs one application instead of two. We price both versions side by side.
Thirty minutes with Charles: what consolidation saves you monthly, what it costs you long-term, and the structure that captures the first without the second.
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General information only, not credit or financial advice. Consolidating short-term debt into a long-term loan can increase the total interest paid over time even where the rate is lower. All lending subject to assessment and approval. If you are in financial difficulty, free help is available from the National Debt Helpline on 1800 007 007.
