Rolling high-interest debts — credit cards, personal loans, car finance — into your home loan can significantly reduce your monthly repayments and simplify your finances. But it's not right for everyone, and the long-term cost depends on what you do next. Blambles assesses it honestly.
Debt consolidation — in the context of home lending — means rolling one or more high-interest debts (credit cards, personal loans, car loans) into your mortgage. Because your home loan interest rate is almost always much lower than the rates on credit cards (which can be 18–22%) or personal loans (which can be 8–15%), the consolidated debt attracts a much lower rate — often reducing your total monthly repayments significantly.
The mechanics are straightforward: you refinance your existing home loan to a higher amount, with the additional funds used to pay out the other debts in full. Those debts are closed, and the total amount owed is now part of your mortgage. You have a single repayment instead of multiple, and the overall rate on your debt is considerably lower.
However, it's important to be clear-eyed about the trade-off. Your mortgage is typically a 25–30 year loan. If you consolidate a $15,000 credit card balance into a 28-year mortgage and make only the minimum repayments, you'll end up paying more in total interest over that period than if you'd paid the credit card off separately in 3–4 years. The benefit of consolidation is only realised if you use the freed-up monthly cash flow to make extra repayments on the mortgage — or if your credit card debt situation was genuinely unsustainable.
Lenders also have their own policies around debt consolidation. Some require evidence that the debts being consolidated are closed at settlement. Others limit how much can be consolidated based on your equity and LVR. And a lender's credit assessment will include the debts being consolidated in their evaluation of your overall financial health — which can sometimes reduce your borrowing capacity rather than increase it.
Blambles will always give you an honest assessment of whether debt consolidation makes financial sense in your specific situation — not just whether it's available to you.
Instead of managing multiple payments to different lenders at different times, you have one repayment — which simplifies your budget and reduces the risk of missing a payment.
Moving debt from credit card rates (18–22% p.a.) to a home loan rate is a significant reduction — and that rate difference is what drives the real saving in monthly repayments.
Lower monthly repayments can free up cash flow — giving you breathing room to rebuild savings, pay down the mortgage faster or handle unexpected expenses.
If your property has grown in value, you may have significant equity available — debt consolidation is one way to put that equity to work by reducing your high-cost debt.
Blambles doesn't just show you the monthly saving — he models the total cost over the life of the loan and gives you a clear picture of whether the trade-off makes sense for your situation.
Consolidating and closing credit cards or personal loans can be the catalyst for a fresh start — particularly where the debts arose from a period of financial difficulty that's now resolved.
We review your existing mortgage, the debts you want to consolidate and your property's current value — to establish how much equity is available and whether the consolidation is viable at your LVR.
Blambles models the total cost of the consolidation — including the long-term interest cost of adding short-term debt to a 30-year mortgage — so you can make a genuinely informed decision.
If consolidation makes sense, we identify the best refinance option — considering both the new rate and the lender's policy around debt consolidation and additional borrowing purposes.
At settlement, the new loan pays out your existing mortgage plus the consolidated debts. Those debts are closed. You have a single, lower-rate mortgage and a cleaner financial position.
The real benefit of consolidation comes from applying the monthly saving to extra repayments on the mortgage. Blambles helps you set up the loan to make this as easy as possible.
Debt consolidation is one area where an honest assessment matters more than a slick pitch. Some lenders and financial services providers make debt consolidation sound like a no-brainer — without adequately explaining the long-term cost implications of rolling short-term debt into a 30-year mortgage. Blambles always shows you both sides of the equation.
Access to 40+ lenders also matters here: different lenders have different policies around how much can be consolidated, what types of debt they'll accept and what LVR they'll lend to for this purpose. Blambles identifies the right lender for your specific situation — not just the most convenient one.
And as always, the service is free to you as the borrower. Blambles job is to give you genuinely better information than you'd get going direct to a bank.
Not necessarily — and we'll always tell you if we don't think it's the right move. Debt consolidation works well when it genuinely reduces your financial stress and you use the cash flow saving to pay down the debt faster. It works less well when the debts being consolidated are relatively small amounts at manageable repayment levels, or where there's a risk of accumulating more credit card or personal loan debt after consolidation. Blambles models both scenarios so you can decide with full information.
Yes — car loans can be consolidated into your home loan in the same way as credit cards and personal loans. The car no longer acts as security for the debt once it's rolled into the mortgage — the loan becomes unsecured from the car's perspective and secured against your home instead. Most lenders will consider this as part of a refinance, subject to equity and LVR limits.
Most lenders require that credit cards being consolidated are paid out and closed at settlement — not just paid to a zero balance. This is important: leaving a credit card open (even with a zero balance) means it counts against your borrowing capacity in future credit assessments. Closing the accounts removes that liability and reduces the risk of re-accumulating debt on those cards.
You need sufficient equity in your home to accommodate the additional debt without taking your LVR above the lender's maximum. Most lenders prefer to keep the total loan at or below 80% LVR for debt consolidation — meaning the higher the value of your property relative to your existing mortgage, the more room you have. Blambles can assess your available equity and how much debt you can consolidate within these limits.
Free consultation, no obligation. Blambles will give you an honest assessment of whether consolidation makes sense — and find the right loan if it does.