If you find yourself in a situation where you have equity available in your house, and also have a bunch of other debts, such as credit cards or auto loans, you may consider refinancing and rolling the debts into the new mortgage.Most people will tell you not to do a consolidation loan, but, like so many other things, “It Depends”.

Usually this would be a financial planner or advisor that regularly reviews your finances with you.

Accountability can also come from an annual mortgage checkup with a mortgage planner.

By consolidating your debts you may be able to reduce the amount you pay each month in repayments.

Home loan interest rates are generally lower than the interest rates charged on credit cards or personal loans, so by rolling these debts into your mortgage, the total amount that you have to repay each month will reduce.

There are three main ways that you can do this: A significant benefit of consolidating your credit cards onto a personal loan is that a personal loan has a defined lifespan.

That is, your repayments are calculated in order for you to be able to pay the loan off over a certain time frame.If that sounds familiar to you then debt consolidation might be a means to minimise the impact that this debt has on your cashflow.“Debt consolidation” means refinancing your debt onto the lowest interest rate possible – and setting up a realistic repayment plan to get it paid off!Even is this borrower needed to finance a new car in a few years, the added equity in their house would exceed the new auto loan liability.The usual outcome, however, is that once the habit if credit cards and auto loans is broken, a person finds it easier to save, so they are able to pay cash for future cars.In this example below, a client used a 15 year mortgage to pay off ,000 in credit cards and car loans.