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Consolidate debt into your mortgage
Swap high-interest cards and loans for one mortgage payment, if the numbers work over the long run. We show you both sides before you decide.
- 5-yr fixed
- 4.69%
- 5-yr variable
- 3.70%
Updated Oct 8 · on approved credit · Compare to bank rates
How a debt consolidation refinance works
A debt consolidation refinance replaces your mortgage with a larger one and uses the extra money to pay off credit cards, car loans or lines of credit. Mortgage rates are usually far lower than card rates, so your total monthly payment can drop sharply, and several due dates become one.
It has limits. Most lenders will refinance up to 80% of your home's appraised value, and mortgage insurance isn't available for this kind of refinance, so at least 20% of your home's value has to stay as equity. If you are partway through your term, breaking your mortgage usually costs a prepayment penalty. And debt that would have been paid off in a few years, spread over a mortgage amortization, can end up costing more in interest than it saves. We put the full cost in front of you so you can decide with the numbers.
Weigh these before you sign
The penalty
Breaking a fixed-rate mortgage early usually costs the greater of three months' interest or the interest rate differential, which can run to thousands of dollars. At renewal there is no penalty.
Closing costs
A lawyer or notary, an appraisal and a discharge fee from your current lender. Some lenders cover part of these, so it's worth asking before you choose one.
The long-term cost
Lower payments over a longer amortization mean more interest overall. In the Financial Consumer Agency of Canada's example of a $300,000 mortgage at 5%, a 30-year amortization costs about $103,000 more interest than a 20-year one.
How it works
How we run the numbers
List every debt
The balance, rate and monthly payment on each card, loan and line of credit, so we know exactly what you pay today.
Price the refinance
Your home's value and the 80% limit, your penalty if you are mid-term, and legal and appraisal costs. Our renewal penalty tracker gives you a first estimate of the penalty.
Compare the alternatives
A full refinance, a blend-and-extend with your current lender, a home equity line, a second mortgage or waiting until renewal, side by side on total cost.
Pay off the debts
Your lawyer or notary pays the debts directly from the new mortgage. Then we set a payment plan that clears the consolidated amount faster than the minimum.
Frequently asked questions
You have questions — we have answers!
Debt Consolidation Mortgages
How much debt can I consolidate?
Up to 80% of your home's appraised value, minus your current mortgage balance and any penalty or costs paid from the new loan. On a home worth $900,000 with a $500,000 mortgage, that is up to $220,000 before costs. You also have to qualify for the new, larger mortgage at the stress test rate, so your income can limit the amount even when your equity doesn't.
Can I use an insured mortgage to consolidate debt?
No. Mortgage insurance isn't available on a refinance to consolidate debt, which is why you need at least 20% equity left in your home. The only insured refinance today is the federal program for adding a secondary suite, and that money can only go toward building the suite.
Is it worth paying a penalty to consolidate now?
Sometimes. If high-interest balances cost you more over the rest of your term than the penalty does, consolidating now can still come out ahead. If your renewal is close, waiting or a blend-and-extend with your current lender may cost less. We lay the options out side by side.
What if I don't qualify for a refinance?
A refinance is qualified at a higher test rate, the greater of your contract rate plus 2% or 5.25% at federally regulated lenders, and needs that 20% equity. If you fall short, a second mortgage or private lending can sometimes help, at higher rates and fees and only with a clear plan back to a regular lender. A non-profit credit counsellor is also worth a call.
How do I avoid ending up back in debt?
Pay the consolidated amount down faster than the new minimum, for example by raising your mortgage payment or using your prepayment privileges, and keep the cleared cards for emergencies only. We show you what a higher payment saves before you close.
Today's rates
Our rates vs the banks'
We shop 50+ lenders, so the rate you're offered isn't limited to one bank's rate sheet. Updated Oct 8.
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Everyone's rate is different. What's yours?
Our job is to find you a competitive rate and terms that fit. Your rate qualification depends on certain factors, such as credit score and home equity, as per Canadian regulations. Get your details fast — there's no cost and no obligation.
- Current variable mortgage rate
- 3.70%
- Current prime rate
- 4.45%
| Term | Bank posted | Our rates | Action |
|---|---|---|---|
| 6 Months | 7.89% | 4.79% | Get this rate: 6 Months |
| 1 year fixed | 5.49% | 4.64% | Get this rate: 1 year fixed |
| 2 year fixed | 5.44% | 4.44% | Get this rate: 2 year fixed |
| 3 year fixed | 6.05% | 4.54% | Get this rate: 3 year fixed |
| 4 year fixed | 6.01% | 4.39% | Get this rate: 4 year fixed |
| 5 year fixed | 6.19% | 4.69% | Get this rate: 5 year fixed |
| 7 year fixed | 6.41% | 4.79% | Get this rate: 7 year fixed |
| 10 year fixed | 6.81% | 4.79% | Get this rate: 10 year fixed |
| 5 year variable | No bank rate | 3.70% | Get this rate: 5 year variable |
Bank posted rates are the big banks' posted rates published by the Bank of Canada (1, 3 and 5 years) and by Dominion Lending Centres (other terms). Some conditions may apply. Rates may vary from province to province. Rates subject to change without notice. Rates change often and depend on your down payment, credit and property; on approved credit (O.A.C.). E.&O.E.
Contact us
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Contact info
Call, email or send us a message. We negotiate with over 50 lenders to find the right mortgage for you.
- Our location525 W 8th Ave #800, Vancouver, BC V5Z 1C6
- Phone number778-838-8005
- Email addressinfo@coastalblue.ca