This applies to you if you:

  • Have credit card, car loan, or personal loan debt at 10–25% interest
  • Own a home in Calgary with at least 20% equity
  • Are paying $500–1,500/month servicing high-interest debt
  • Want to free up cash flow without selling your home
  • Are considering whether to refinance or use a HELOC

The Math That Changes Everything

$40,000 in credit card debt at 20% vs mortgage at 5%:

Credit card minimum payment (interest only): $667/month

Same $40K added to mortgage (25yr amortization): $210/month

Monthly saving: $457 · Annual saving: $5,484

The trade-off: you pay more total interest on the $40K over 25 years than you would if you paid it off aggressively. But for most Calgary homeowners carrying high-interest debt, the cash flow relief is the priority — and the math strongly favours consolidation.

What You Can Consolidate

Debt TypeTypical RateConsolidatable?
Credit cards19.99–28%Yes — most common
Car loans6–12%Yes
Personal loans8–20%Yes
Lines of creditPrime + 2–5%Yes
CRA tax debtVariesYes — specific lenders required
Student loansPrime + 1–5%Sometimes — broker dependent

What You Need to Qualify

  • At least 20% equity remaining after refinance (80% LTV maximum)
  • Pass the stress test — qualify at your rate + 2% or 5.25%, whichever is higher
  • Stable income (T4 or 2 years self-employed)
  • Acceptable credit score — doesn't need to be perfect
  • Current appraisal to confirm home value

How Much Can You Access?

Calgary example — $650K home:

Home value: $650,000

80% LTV: $520,000

Current mortgage: $380,000

Accessible equity: $140,000

Refinance vs HELOC for Debt Consolidation

1Refinance (increase mortgage)Best for large lump sum
Fixed rate, clear repayment schedule, typically lower rate than HELOC. Best when you know the total amount and want certainty. See the mortgage refinancing Calgary guide for the full comparison.
2HELOCBest for flexible access
Variable rate, revolving credit. Pay interest only on what you draw. Best when needs are ongoing or uncertain in total amount. See the HELOC vs refinance guide for detailed comparison.

The Honest Trade-Off

Consolidating debt into your mortgage extends your amortization on that amount. You pay less interest per year on the debt — but potentially for more years. For most people carrying 20%+ credit card debt, the immediate monthly savings far outweigh the long-term interest cost. A broker models both numbers clearly so you can decide with complete information.