Debt consolidation through your mortgage

Credit cards in Canada commonly charge 19.99% to 22.99%. A mortgage secured against your home costs a fraction of that. Consolidation moves the expensive balances into the cheap loan and replaces several payments with one.

When consolidating works

• You are making minimum payments on several cards and the balances are not moving.
• Your total unsecured debt is $20,000 or more and you own a home with equity.
• You are using one card to pay another.
• Collection calls have started, or an account has gone to collections.
• You want one payment and one date instead of six.

Read this before you consolidate

• Someone carrying $60,000 across cards and a line of credit often pays over $1,500 a month. Folded into a mortgage the same balance can cost a few hundred.
• You are converting unsecured debt into debt secured against your home. That raises the stakes if you cannot pay.
• Stretching $60,000 over 25 years can mean more total interest than the cards, even at a much lower rate.
• The fix is to keep paying the old higher amount and direct the difference at the mortgage.
• Ask to see both the minimum-payment path and the accelerated path before you sign anything.
• Reduce or close the cleared cards. Consolidation only works once if the balances rebuild.

What to bring to the first call

• Government photo ID for each applicant
• Income confirmation for each applicant
• Current mortgage statement including the payout penalty
• A current statement for every debt you want cleared, showing balance, rate and minimum payment
• Property tax bill
• Recent appraisal or a realistic sense of your home's value

How we run the numbers

1. 01 List every debtBalance, interest rate and minimum payment for each. This is the single most useful thing you can bring to the first call.
2. 02 Confirm available equityWe check what can be borrowed against the property and whether a refinance, second mortgage or HELOC gets there most cheaply.
3. 03 See both repayment pathsThe minimum-payment version and the version where you keep paying what you pay now. The gap between them is usually tens of thousands of dollars.
4. 04 Fund and pay outYour lawyer pays the creditors directly from the mortgage proceeds, so the accounts are cleared at closing rather than left to you.

Questions we get asked

Will consolidating hurt my credit score?

In the short term there is a credit inquiry and new debt reporting. Within a few months, paying balances to zero usually improves utilization, which is a large part of a score. The lasting risk is running the cards back up.

Can I consolidate if I have missed payments?

Often yes. Alternative lenders weigh the equity in your home more heavily than a bank does. The rate is higher, and the plan should be to repair credit and move to a better lender at renewal.

Should I close the credit cards afterward?

Closing every card can hurt your score by shrinking available credit and shortening your history. A common approach is to keep one or two, cut the rest, and set the remaining balances to pay in full each month.

Am I actually saving money?

On the monthly payment, almost always. On total interest, only if you keep the payment up rather than dropping to the mortgage minimum. We will hand you both numbers, not just the flattering one.