Guide
Should I refinance to consolidate debt?
It can make sense if high-interest debt is straining your budget: in our example the combined payment falls from $2,658 to $1,884 a month. But total interest can rise because the debt is repaid over 30 years — in the same example it goes from $326,656 to $398,088.
Last reviewed November 13, 2026 · Examples use this week's rates
30-yr fixed avg 7.11% as of November 12, 2026
Source: Freddie Mac PMMS
What you gain
Credit cards often carry rates several times higher than a mortgage. Moving that balance into your mortgage replaces several payments with one and can sharply cut what you pay each month. Paying cards to zero also lowers your credit utilization.
What you risk
You turn unsecured debt into debt secured by your home, so missed payments now put the house at risk. You also pay closing costs on the whole new loan and may reset your mortgage clock. And if the cards get used again, you can end up worse off than before.
The biggest hidden cost is time. A balance you'd have paid off in a few years is now spread over decades. That is why our calculator shows total interest before and after, and warns when it goes up.
How to get the benefit without the trap
Consider a shorter term, or keep paying close to your old combined amount on the new loan so the extra goes to principal. If your current mortgage rate is far below today's rates, a home equity loan or HELOC for just the debt may cost less than refinancing the whole balance — compare them with the cash-out vs HELOC calculator.
Worked example at this week's rates
- Same example on a 15-year term at 7.11%: the payment is $2,534 versus $2,658 today, and total interest is $176,115 versus $326,656. A shorter term trades some monthly relief for much less interest.
Rates are Freddie Mac PMMS weekly averages — a national purchase-mortgage benchmark, not a local refinance quote. Closing costs are estimated at 2% unless stated, and payments are principal and interest only.
Run your own numbers
Use the Debt consolidation refinance calculator with your balance, rate and costs.
Estimates only. Default rates are Freddie Mac PMMS weekly averages — a national purchase-mortgage benchmark, not a local refinance quote. Payments are principal and interest only. reficalculator.com is not a lender or broker; see how we calculate.
Frequently asked questions
- Is it smart to use home equity to pay off credit cards?
- It can lower your payment and interest rate, but it secures the debt with your home and can raise total interest over a long term.
- How much can I save?
- It depends on your rates, balances and term. The debt consolidation calculator shows monthly and lifetime numbers for your inputs.
- Will I pay closing costs?
- Yes, on the full new loan amount. We estimate 2% for break-even purposes.
- What credit score do I need?
- Requirements vary by lender and program. Higher scores usually get better pricing.
- Is a HELOC better for debt consolidation?
- When your current mortgage rate is low, a second loan for just the debt can cost less than refinancing everything.