Refinancing your home loan to consolidate debt

Refinancing multiple debts into a single home loan can help simplify your finances and make your repayments more manageable.


What is a debt consolidation home loan?

A debt consolidation home loan is when you combine your outstanding debts under your mortgage. Instead of paying off loans such as credit cards, a car loan or personal loan at different interest rates or with different lenders, you pay off all your debts with one regular repayment and one interest rate.

How do I refinance to consolidate my existing debt?

One of the biggest potential benefits to consolidating debt into a mortgage is to only have one repayment to keep track of, which could make your finances simpler. Generally, home loan interest rates are lower than other types of finance such as personal loans. So, if all of your debt is rolled into a single home loan, you could potentially be paying less in interest each month.

You could consolidate debts such as:

  • Credit cards
  • Personal loans
  • Car loans

If you’re unsure on whether you would be able to save money by refinancing, you can speak to one of eChoice’s experienced mortgage experts, by clicking the button below and filling out our web form.

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What factors should I consider when refinancing to consolidate debt?

Lender’s mortgage insurance (LMI)

Depending on your situation, you might still be liable for Lenders Mortgage Insurance. Generally, Lenders Mortgage Insurance is not transferable, so if your loan to value ratio is still more than 80% of the value of your property, you would likely need to pay it again. It might also be worth looking into a loan guarantor (such as a parent) if this is the case, to help you avoid LMI costs.

Break and set-up fees

Those who are refinancing also might be liable for a variety of fees. For example, your current home loan might carry a closing or discharge fee. Those with fixed rate loans might also need to pay a break fee. Then, the new lender may also charge a set-up fee to take care of the application paperwork. All these fees depend on your circumstances, so it’s best to look through your fine print and to talk to your lender to see what you could be up for. In some cases, despite all the fees it can still be worth refinancing.

Make sure you will not end up paying more

In some cases, consolidating other types of debt into your home loan deal will mean that you’re paying interest on it for longer, resulting in more interest payments over the loan term. That’s where its a good idea to speak to an expert.

Can I consolidate debt into an existing first-time home loan?

Yes, in most cases anyone is eligible to consolidate debt! If you have a history of paying off your current loan on time, many lenders would consider you, even if it is your first mortgage.

An eChoice mortgage expert can assist you with this part of the process and provide more information to help you make an informed decision.


If you’re ready to refinance to consolidate debt into your home loan, get cash out or reduce your current interest rate, here’s how you get started online:

Step 1. Click on the button below to go to our web form.

Step 2. After answering a few questions, we’ll provide you with a free refinancing comparison report to show how much you can potentially save, and one of our experienced mortgage experts will give you a call back to assist.

eChoice is here to help you through the entire home loan process and assist with all the paperwork to make sure you get the right home loan!

Find out how

Things you should know: The advice provided is general advice only as, in preparing it we did not take into account your lending objectives, financial situation or particular needs. Before making a decision on the basis of this advice, you should consider how appropriate the advice is to your particular lending needs, and objectives.