If you own a home and you are carrying credit card balances, the maths is not subtle. Canadian credit cards commonly charge 19.99% to 22.99%. Mortgage money costs a fraction of that. Moving the balance from one to the other saves real money every month.
The question is which of the three routes to use. They are not interchangeable, and the deciding factor is usually something people do not check first.
Start with your mortgage penalty, not with rates
Before comparing anything, call your lender and ask for a written payout statement showing the penalty to break your current mortgage today.
On a variable mortgage, the penalty is typically three months of interest. On a $500,000 mortgage that is a manageable number, and refinancing usually makes sense.
On a fixed mortgage, the penalty is the greater of three months interest or the interest rate differential. If you locked a low rate years ago and today's rates are higher, the IRD can run to $15,000 or $25,000. That single number can flip the answer completely, and it is the reason a broker who recommends a refinance without reading your penalty is guessing.
Refinance
You pay out the existing mortgage and replace it with a larger one, up to 80% of the appraised value. The debt is cleared from the proceeds.
It gives you the lowest rate of the three, because everything sits in one first-position mortgage. One payment, one lender, one maturity date.
The costs are the penalty, an appraisal usually $350 to $600, legal fees usually $900 to $1,800, and a discharge fee. Closing typically takes three to five weeks.
It wins when your penalty is small, your current rate is close to today's rates, or your mortgage is maturing soon.
Second mortgage
Your first mortgage is untouched. A second lender registers a separate charge behind it, usually up to 80% of value across both, sometimes higher at a higher price.
You keep the rate you already have. If you are sitting at a rate well below today's market, this is often the entire argument. There is no penalty on the first mortgage because you are not breaking it. Closing is faster, frequently one to two weeks.
The costs are a higher rate on the second portion, a lender fee and a broker fee, plus legal costs. You also now have two mortgage payments.
It wins when your penalty is large, when your existing rate is well below market, or when you need funds quickly.
HELOC
A revolving credit line secured against the home, capped at 65% of value on the revolving portion and 80% when combined with a mortgage.
You pay interest only on what you draw. Repay it and the room comes back. That flexibility is genuinely useful when the amount you need is uncertain.
Two things work against it for debt consolidation specifically. It is variable, so your cost moves with prime. And the minimum payment is interest only, which means the balance does not reduce unless you make it reduce. That is the same behaviour that created the credit card problem in the first place, at a lower rate.
It wins when the amount is uncertain or staged, or when you want a reserve in place rather than a lump sum. For a fixed, known balance you intend to retire, it is usually the weakest of the three.
Working an example
Take $70,000 across cards and a line of credit, roughly $1,750 a month in minimum payments, on a home worth $950,000 with a $520,000 mortgage at 2.49% fixed with three years remaining.
The refinance route would clear everything into one mortgage at the lowest rate. But breaking a 2.49% mortgage with three years left, when current rates are higher, produces an interest rate differential penalty that can approach $25,000. That penalty is paid before you have saved a dollar.
The second mortgage route leaves the 2.49% in place. You borrow $70,000 plus costs at a higher rate on the second portion only. The blended cost across both mortgages is very likely lower than the refinance once the penalty is counted.
Nothing about this is decided by comparing advertised rates. It is decided by the penalty, and by how much of your borrowing stays at the low rate you already hold.
The part that decides whether any of this works
All three routes cut your monthly payment sharply. That relief is the danger.
If your payments drop from $1,750 to $500 and you spend the difference, you have stretched $70,000 over 25 years and will pay more total interest than you would have on the cards, at a much lower rate. Lower rate, longer time, bigger total.
The version that works is keeping the payment where it was. Pay the new required amount, then direct the difference at the balance as a lump sum prepayment or an increased payment. On most mortgages you can raise your payment by 15% to 20% annually and make an annual lump sum without penalty.
Ask for both numbers before you sign anything: total interest at the minimum payment, and total interest if you keep paying what you pay today. If a broker only shows you the flattering one, ask for the other.
How to choose in one paragraph
Get your penalty in writing. If it is small and your rate is near market, refinance. If it is large or your rate is far below market, use a second mortgage. If the amount you need is uncertain or you want a standby reserve rather than a lump sum, use a HELOC, and set your own repayment schedule rather than relying on the interest-only minimum.