Using a Mortgage Refinance to Consolidate Debt

Refinancing to consolidate debt means increasing your mortgage to pay off higher-interest unsecured debt — credit cards, car loans, lines of credit — replacing several payments at higher rates with one payment at your mortgage rate, which is typically far lower.

The math is often genuinely favourable: mortgage rates are usually a fraction of typical credit card rates, so consolidating can meaningfully reduce total interest paid and simplify your monthly obligations into one payment.

The tradeoff is real, though: unsecured debt (like credit cards) doesn't put your home at risk if you can't pay it. Once that debt is rolled into your mortgage, it does. Consolidating also stretches that debt's repayment over your mortgage's full amortization unless you specifically structure it otherwise — meaning you could end up paying more in total interest over a longer timeline, even at a lower rate, if you're not deliberate about it.

A refinance for debt consolidation triggers a new stress test on the full, increased mortgage amount — run your numbers through our affordability calculator's refinance mode before assuming you'll qualify.