Refinance for Debt Consolidation:
What's Possible
Rolling high-interest debt into your mortgage can cut your monthly payments by $400–800. Here's how it works, what it costs, and when it makes sense.
How Debt Consolidation Refinancing Works
Credit cards charge 19–22% interest. Lines of credit: 8–12%. Your mortgage: 4–6%. By refinancing your mortgage to a larger amount and using the extra funds to pay off high-interest debt, you trade expensive debt for mortgage debt — significantly reducing your total monthly obligations.
The catch: you need equity in your home (at least 20% remaining after the refinance), and there are costs involved — appraisal, legal fees, and possibly a discharge penalty if mid-term. Deane runs the full break-even calculation before recommending this approach.
Estimate Your Monthly Savings
Estimated Monthly Interest Savings
$375
vs paying 20% credit card interest — illustrative only
What debts can be consolidated?
Credit cards, personal loans, auto loans, lines of credit, student debt, and even tax arrears (in some cases). Any high-interest, unsecured debt can be a candidate.
How much equity do you need?
After the refinance, you must maintain at least 20% equity (80% loan-to-value). On a $500,000 home, maximum refinance is $400,000. If you owe $320K and want to consolidate $40K in debt, you need a home worth at least $450K.
What does it cost?
At maturity: $1,500–$3,000 (legal + appraisal). Mid-term: add the discharge penalty ($2,000–$10,000+). The break-even calculation determines if it's worth it.
Calculate Your Potential Savings
Tell Deane your debt situation. He'll model the consolidation and break-even — free.
Schedule Your Free Consultation with Deane
Takes 2 minutes. Deane will respond within 24 hours with personalized options.
Ready to Consolidate Your Debt?
Deane will calculate your break-even and recommend the most cost-effective path.