Debt consolidation

Consolidating debt without losing the plot.

Rolling higher-cost debt into the mortgage can reset your monthly cashflow overnight. It can also cost you more in total interest if it isn't ring-fenced properly. Both can be true on the same refinance.

The trade-off

Cashflow today vs total interest tomorrow.

Why consolidation works

A credit card at 22% or a personal loan at 12% gets replaced by a mortgage rate around 6%. The headline monthly payment drops dramatically because the balance is now spread across 25-30 years at a much lower rate. Cashflow recovers. Stress drops. The client can breathe.

Why it can quietly backfire

Spreading a 5-year debt across 30 years, even at a lower rate, can mean more total interest paid over the full life. The solution is to 'ring-fence' the consolidated debt in its own split with a shorter term and aggressive extra repayments. Done right, you get the cashflow relief now and pay the old debt off on a realistic timeline — not 30 years.

Q&A

Consolidation FAQs

Does consolidating debt affect my credit score?

Short-term, there's a small dip from the new enquiry and the closure of old accounts. Medium-term, lower utilisation and cleaner account history usually improves the score.

Can I consolidate HECS or business debt?

HECS is paid through the tax system and generally isn't consolidated into a home loan. Business debt can sometimes be, but the serviceability and deductibility implications need a closer look.

Is there a responsible lending angle?

Yes. Lenders apply stricter scrutiny to consolidation refinances — they want to see the underlying behaviour change, not just the debt moved sideways. We work that narrative into the application so it passes credit cleanly.

Keep exploring

General advice disclaimer. The information on this page is general in nature and does not take into account your personal objectives, financial situation or needs. You should consider whether it is appropriate for you before acting on it, and seek professional advice where relevant.

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