Credit cards: 20%. Personal loans: 12%. Your mortgage: <6%. See the problem?
If you have equity in your home, you can consolidate high-interest debts into one mortgage payment and cut your monthly repayments significantly. But it only works if we structure it right. We'll show you the real numbers and whether it genuinely saves you money.
The interest rate gap
The gap between your mortgage rate and your other debts is costing you
Credit cards in Australia typically charge somewhere between 18% and 22% per annum. Personal loans run anywhere from 9% to 15%. A typical home loan rate sits well below both - often less than half what you're paying on those other debts.
If you're carrying $20,000 in credit card and personal loan debt alongside your mortgage, the difference in interest you're paying each year compared to what you'd pay on that same amount at a home loan rate is significant. For many households it's the difference between feeling financially squeezed every month and feeling in control.
The question is whether consolidating those debts into your mortgage is actually the right move for your situation - and how to structure it so you genuinely come out ahead.
The Lender Edge approach
How mortgage debt consolidation actually works
If you own your home and have equity in it, there may be an option to refinance your mortgage to a higher amount, using some of that equity to pay out your other debts. Instead of making separate repayments on a credit card, a personal loan, and your mortgage - each at different rates, on different due dates - you have one repayment, at one rate, to one lender.
Done correctly, this can:
Sharply reduce the total interest you're paying across all your debts
Free up meaningful cash flow every month
Simplify your finances into a single, manageable repayment
Give you a clear timeline to being debt-free
As an independent broker with access to 35+ lenders, we compare the market to find the right loan structure for your situation — not just the most convenient option for any single bank.
What to know before you decide
This isn't right for everyone - and we'll tell you if it's not right for you
Debt consolidation into a mortgage is a genuinely useful tool, but it needs to be done with clear eyes.
Your mortgage runs over a much longer term than a personal loan or credit card. If we simply roll your short-term debts into a standard 25-year or 30-year mortgage without any adjustment to structure, you could end up paying more in total interest over the life of the loan - even at a lower rate - simply because of how long you're paying it for.
There are ways to avoid this. We can structure a separate split within your loan for the consolidated amount, with a shorter repayment schedule so it's paid off in a timeframe that actually makes financial sense. The goal is to give you the rate benefit of the mortgage without the time-cost of a 30-year debt.
Our job is to look at your full situation honestly - what you owe, what you're paying, what equity you have - and give you a clear picture of whether consolidating saves you money, costs you money, or lands somewhere in between. If it doesn't stack up, we'll tell you that too.
What types of debt can be consolidated into your mortgage?
Most lenders will consider rolling in:
Credit card debt: typically the highest priority, given credit card rates often sit between 18% and 22% per annum. Even a modest balance costs a meaningful amount of money each year.
Personal loans: whether for a holiday, home improvement, or unexpected expense, personal loans at 9–15% can be meaningfully cheaper when refinanced into a mortgage structure.
Car finance: depending on the rate and remaining term, car loan balances can often be consolidated, though the structure needs careful consideration.
Store cards and buy now pay later: high-rate, often overlooked, and frequently carrying balances that quietly accumulate interest.
The overall test is whether the outcome puts you in a better financial position. That's not just about the interest rate - it's about the total cost, the repayment structure, and what fits your circumstances.
A free, no-obligation conversation is the fastest way to know whether consolidating your debts into your mortgage would genuinely save you money - and how much. No commitment, no paperwork, no sales pressure. Click the link below to book in a call and we can get the ball rolling.