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Refinance home loan

Refinancing your home loan to consolidate debt: look at the total cost first.

Rolling cards and loans into your home loan can leave you with one repayment at a home loan rate. It also turns short-term debt into long-term debt secured on your home. We go through both sides before anything is applied for.
Answer 9 quick questionsCall 1300 351 008
Debt Negotiators is a fee-based service. Fees, and any commission we receive from a lender, are explained before you decide.
Before you refinance
Your home becomes security for the debts you roll in
Spreading short-term debt over 25 to 30 years can cost far more interest in total
Break costs, fees and lenders mortgage insurance may apply
You need enough equity, lending criteria apply, and some applications are declined

The risks in more detail →

LicensedAustralian Credit Licence 390820
Registered with AFSADebt agreement administrator 1403
Since 2009Bankstown-based team
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The basics

How refinancing to consolidate debt works

Refinancing means a new home loan, with your current lender or a different one, pays out your existing mortgage. To consolidate debt, the new loan is larger, and the extra pays out your other debts. You then have one home loan repayment instead of several.

The debts don’t go away. They move into your home loan and are repaid over its term, often 25 to 30 years. Whether you come out ahead depends on the rate, the fees and how quickly you repay the consolidated amount.

Debt Negotiators holds Australian Credit Licence 390820. Where lending criteria allow, we look at whether a refinance is realistic for you and go through the lending options and their full costs. Home loan refinancing is arranged through Click Financial, the finance and mortgage broking business within A & M Group, the same group as Debt Negotiators. We refer you internally, and A & M Group may receive a commission from the lender. We’ll tell you about it before you decide.

Debts that are often rolled into a home loan
Car and equipment loans
Overdrafts and store finance
Buy now pay later
Some tax debts
Whether a particular debt can be included depends on the lender and how much equity you have.
The downsides

The risks of refinancing to consolidate debt

These matter as much as the benefits. We go through each one with you before you decide.

Your home is security
Credit card and loan debts become part of a loan secured on your home. If you can’t keep up, the lender can act to recover the debt, which can include selling the property.

More interest over a longer term
Debts that might be repaid in a few years are spread over 25 to 30 years. Even at a lower rate, that can cost far more interest in total.

Costs to switch
There may be break costs on a fixed rate, a discharge fee, application and valuation fees, and government charges.

Lenders mortgage insurance
If the new loan is a high share of your property’s value, lenders mortgage insurance may apply. It can make the refinance not worth doing.

Equity and lending criteria
You need enough equity, and the lender looks at your income, expenses and credit history. A credit enquiry is recorded, and some applications are declined.

The cards can fill up again
If paid-out cards stay open and are used again, you can end up with a bigger home loan and new card debt.
Honest answer

When refinancing may make sense, and when it usually doesn’t

It may be worth looking at when
You have enough equity in your home, with room to spare
Your income is steady and the new repayment fits your budget
The total cost, including fees and switching costs, is lower than what you’re paying now
You can repay the consolidated amount faster than the full home loan term
Think twice when
You’re already behind on your mortgage repayments
Your income is uncertain, so a missed repayment would put the home at risk
Break costs or lenders mortgage insurance would outweigh any saving
You own the home with someone who isn’t comfortable using it as security

See the alternatives →

Run the numbers

Adding debts to your home loan: see the trade-off

See how rolling debts into your mortgage changes the monthly repayment and the total interest, and what happens if you keep paying what you pay now.
Cost check

Compare the total cost, not just the repayment

A refinance can make your monthly repayment smaller simply because the debts are spread over many more years. That isn’t the same as costing less. The fair comparison is the total you’d pay under each option, including interest and every fee.

Some lenders let you split the loan so the consolidated amount sits in its own portion, which can make it easier to clear sooner.

The calculator above, and our other debt calculators, give estimates only. They aren’t an offer or approval, and they don’t include every fee a lender may charge.

Costs to ask about before you sign
Break costs if your current loan is on a fixed rate
Discharge fee on your current loan
Application, establishment and valuation fees
Lenders mortgage insurance
Government registration charges
Ongoing account fees on the new loan
Which costs apply depends on your loans. Ask for them in writing.
How we help

How it works with Debt Negotiators

1

Answer 9 quick questions
About a minute. Roughly what you owe, who to, and what comes in each week. Start here.
2

We look at the whole picture
Your debts, home loan, equity, budget and credit file, so we can tell you honestly whether a refinance looks realistic.
3

We compare the full cost
What you pay now against the refinance, including switching costs, fees and the extra interest from a longer term.
4

You decide
If a refinance makes sense, we refer you to Click Financial, the finance and mortgage broking business within A & M Group, to arrange it. If it doesn’t, we’ll say so and go through the other options.
Does it affect my credit file?

Applying records a credit enquiry, and the new loan is listed on your credit file. Several declined applications in a short time can make the next one harder, which is why we check first.

What it costs: Debt Negotiators is a fee-based service. Fees are explained before you decide, and the first conversation costs nothing. If you take out a loan we arrange, we may receive a commission from the lender. We’ll tell you about it before you decide.

If refinancing isn’t right

Alternatives to refinancing

If you don’t want to use your home as security, or a refinance wouldn’t leave you better off, these are the other options we work through.

Debt consolidation loan
A separate loan that pays out several debts, without changing your home loan.
Good to know: unsecured loans usually have higher rates, and lending criteria apply.

Learn more →

Informal arrangements
New repayment terms negotiated with each creditor, based on what you can realistically pay.
Good to know: creditors don’t have to agree, and it may show on your credit report.

Learn more →

Debt agreements (Part IX)
A formal, binding agreement with your creditors to repay an affordable amount over time.
Good to know: it’s a formal insolvency option with income, debt and asset limits, and it’s listed on your credit report and the National Personal Insolvency Index.

Learn more →

Personal insolvency agreements
A formal agreement for higher debts or incomes, administered by a registered trustee.
Good to know: it’s listed on the National Personal Insolvency Index permanently.

Learn more →

We also explain how bankruptcy works. It has serious, long-lasting consequences and is usually a last resort.

Home loan refinance questions

Will refinancing lower my repayments?

It may make each repayment smaller, mostly because the debts are spread over a much longer term. That can cost more overall, so we compare the total cost, including fees and switching costs, with what you pay now.

How much equity do I need?

It depends on the lender and the property. If the new loan would be a high share of your property’s value, the lender may charge lenders mortgage insurance or decline the application.

Can I refinance with bad credit?

Sometimes, but it’s harder. Missed payments or defaults can limit which lenders will consider you and the rate you’re offered. More on bad credit and consolidation.

What does it cost to refinance?

Possible costs include break costs, a discharge fee, application and valuation fees, lenders mortgage insurance and government charges. Debt Negotiators is a fee-based service, and our fees are explained before you decide.

What happens if I can't keep up the new repayments?

Your home is security, so the lender can act to recover the debt, which can include selling the property. That’s why the repayment needs to fit your budget with room to spare.

I rent. What are my options?

Refinancing needs a property to secure the loan. If you rent, a debt consolidation loan, an informal arrangement or a debt agreement may be worth looking at, each with its own downsides.

See whether a refinance stacks up

Answer 9 quick questions, then we call to go through refinancing, its costs and the alternatives.
Answer 9 quick questionsCall 1300 351 008
Debt Negotiators is a fee-based service. The information on this page is general and doesn’t take your circumstances into account. Outcomes depend on your situation, and no outcome is guaranteed. Formal options such as debt agreements and personal insolvency agreements can affect your credit report and your ability to get credit. ACL 390820 · AFSA RDAA 1403.
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