Rolling cards and car loans into a mortgage almost always lowers the monthly outgoing, and the pitch stops there. The question it leaves out is what a balance clearing in four years costs when it is paid over thirty instead, and what it means that unsecured debt is now secured by your house. This works out all of it, and shows the version of the deal that is actually worth doing.
An estimate from your figures, not advice, and not an offer of credit.
The third column is rarely shown, because it does not feel like relief. It is the same money out of the household every month as today.
| Keep things as they are | Consolidateand take the monthly saving | Consolidate and redirectthe saving goes back in |
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Three things, and the first is the one that actually hurts people.
The arithmetic is simple and the pitch is selective. These are the parts that decide whether it is a good idea, most of which are not in the pitch.
Take any set of balances, cut the rate, and stretch the term from four years to thirty: the payment falls. It falls whether or not the transaction is a good one, so the size of the monthly saving tells you almost nothing about whether to do it.
The useful questions are what the total interest does, what happens to the security behind the debt, and what happens to the accounts afterwards. All three are answerable. None of them is a payment.
Not the rate, the rate almost always improves. The term.
A $22,000 card balance at 22.9% with a $660 payment clears in about 43 months and costs roughly $6,000 in interest. The same $22,000 inside a 30-year mortgage at 6.75% costs about $29,000 over its life. The rate fell by sixteen points and the interest more than quadrupled, because the money is borrowed for eight times as long.
This is the single thing the pitch leaves out, and it is arithmetic rather than opinion. Whether it matters depends on what you do with the monthly saving.
Consolidate, then pay the entire monthly saving back into the new mortgage as extra principal.
The household pays out exactly what it pays out today, so nothing has been given up. But the balances are now at mortgage rates rather than card rates, and the overpayment goes straight at principal. The mortgage clears years early and most of the extra interest never happens.
This column is rarely shown, because it produces no monthly relief, and monthly relief is what the product is usually sold on. On most sets of figures it is the version that costs least, which is a different thing from being right for a given household.
This is the part that does not appear in any payment comparison, including the one above, and it is the part that actually hurts people.
A credit card is unsecured. Miss payments and you face collections, a damaged credit file, and eventually a lawsuit. It is bad. It is survivable, and in the worst case unsecured debt can be discharged in bankruptcy.
A mortgage is secured by your house. Miss enough payments and the remedy is foreclosure. Moving a balance from the first category to the second lowers its interest rate and raises its consequences at the same time.
That trade can still be worth making. It should be made deliberately, by someone who has been told it is happening.
Rolling debt into a mortgage is a cash-out refinance, and agency cash-out on a primary residence is generally limited to 80% of the value. Above that, the transaction usually is not available at all.
Cash-out also prices above a rate-and-term refinance, the loan-level adjustments are heavier, so the rate to model is not the one you would see advertised and certainly not the one you have now.
Both of these are why a consolidation that works on paper sometimes cannot be written, and it is better to find that out before the debts have been counted as good as gone.
A consumer debt does not amortise over a stated term, it clears when the payment has beaten the interest for long enough, and the length of that depends entirely on the payment.
If the payment does not exceed the monthly interest, the balance never clears at all and grows instead. That case genuinely is an emergency, and it is the one where consolidating is not a trade-off but a rescue.
The calculator above runs each debt at the payment you actually make rather than assuming a five-year term, because the difference between those two assumptions is frequently the whole answer.
The most common way this goes wrong is not arithmetic. Paying a card to zero does not close it, and a household whose spending has not changed usually finds the balance again within a couple of years, now alongside a larger mortgage.
That is the outcome to plan against, and the plan has to be made before the loan closes, not after. Whether the accounts get closed, whether one stays open for emergencies, what the money that used to service the debt now does instead.
A calculator cannot model any of that. It is still the most important variable on the page.
A home equity loan or line leaves the first mortgage alone, which matters enormously if the existing rate is low. Taking a 3% first mortgage to 6.75% in order to reach $52,000 of debt is usually a catastrophic trade, and a second lien at a higher rate on a smaller balance frequently wins.
A 0% balance transfer, where the balances are small enough and the credit supports it, beats any mortgage on cost, if it is genuinely cleared inside the promotional window.
A personal loan at a higher rate but a five-year term can cost less in total than a mortgage at half the rate over thirty years, and it leaves the house out of it entirely.
None of these is better in general. All of them should be priced before a cash-out refinance is, and the one thing they have in common is that they do not put the house behind the debt.
The tax treatment. Interest on debt used to consolidate consumer borrowing is generally not deductible as home acquisition debt, whatever the deduction on the rest of the mortgage, the money was not used to buy, build or substantially improve the home. This page claims no deduction and nobody should assume one. Ask a tax adviser about your own position.
It also does not model a second lien, a home equity line, a balance transfer, a personal loan, minimum-payment behaviour on revolving accounts, promotional rates that expire, or any change in your credit score from the transaction, which can move in either direction.
The costs are financed into the loan, which is what usually happens. Paying them in cash instead changes the arithmetic slightly in your favour.
When a balance is not clearing at all, because the payment does not cover the interest. When the rate gap is enormous and the amounts are large enough that the term effect is swamped. When the alternative is missing payments.
And when the household intends to redirect the saving rather than spend it, which turns the transaction from a way of paying more interest more comfortably into a way of paying less interest and clearing the mortgage early.
Used deliberately it is a reasonable tool. Used for relief alone it is an expensive one. Which of those it is depends on the household rather than on the arithmetic, and this page cannot tell you which you are, only what each path costs.
The parts of this that are worth knowing before you decide.
It depends, and the deciding factor is usually what happens to the monthly saving rather than the rate. Where a household redirects it into the mortgage as extra principal, the arithmetic is frequently favourable. Where it is spent, the result is almost always a lower payment bought with more total interest.
The other deciding factor is whether the balances come back. If they do, the household ends up with the larger mortgage and the old debt, which is worse than where it started.
Because the term went up far more than the rate went down. A balance clearing in four years now runs for thirty. Interest is rate multiplied by time, and the time changed by a factor of seven.
That is not a reason to refuse, it is the price of the lower payment, and it is worth knowing what you are buying.
This is the most important difference and it does not show up in any payment comparison. Missing a credit card payment is a collections and credit-file problem. Missing mortgage payments, for long enough, is a foreclosure.
Consolidating lowers the interest rate on that money and raises the consequence of not paying it. Both things are true at once.
Agency cash-out on a primary residence is generally limited to 80% of the value, so the new loan, existing balance plus the debts plus the costs, has to fit inside that.
If it does not, the transaction usually is not available. A home equity line behind the existing first mortgage may still be, and is worth pricing.
Very often, especially if your current mortgage rate is low. Giving up a 3% first mortgage to reach the equity behind it is usually a terrible trade, you are repricing the entire balance to reach a fraction of it.
A second lien at a higher rate on a much smaller balance frequently wins outright. Our HELOC calculator prices that side.
Generally not, for the consolidated portion. Interest is deductible as home acquisition debt where the money was used to buy, build or substantially improve the home, and money used to pay off credit cards was not.
This page claims no deduction anywhere in its arithmetic. If somebody is using a tax benefit to make the numbers work, ask them to show you which section they are relying on, and ask your own tax adviser.
It can move in either direction and the effect is usually temporary. Paying revolving balances to zero lowers utilisation, which tends to help, sometimes a great deal. Opening a new large mortgage and closing old accounts tends to hurt in the short term.
Nobody can give you a reliable number in advance, and any calculator that offers one is guessing.
That is the real question, and it is about the household rather than the loan. Leaving them open preserves your credit history and available credit; it also preserves the way the balances got there.
Whatever is decided, decide it before closing rather than after. The most common failure of this transaction is not the arithmetic, it is the balances returning.
Then the balance is growing and no amount of patience fixes it. That is the case where consolidating is a rescue rather than a trade-off, and the comparison on this page understates how much it helps, because there is no finite figure on the other side.
If you are in that position, the conversation is worth having quickly.
Mechanically yes. But a car loan is usually already at a reasonable rate over a short term, so folding it into a thirty-year mortgage is where most of the extra interest gets created, and the car will be gone long before the debt is.
Run it both ways. Frequently the right answer is the cards only.
Yes, and by enough to matter. Cash-out carries heavier loan-level price adjustments than a rate-and-term refinance, so the rate is higher, sometimes noticeably.
Do not model this with the rate you have now or with an advertised rate-and-term figure. If the comparison only works at a rate you are not going to be offered, it does not work.
That the monthly saving is not the benefit, it is the thing being traded for the benefit. A household that redirects it keeps both.
Taylor Weiner, mortgage loan originator, NMLS #263090 · Lower, LLC, NMLS #1124061 · 5950 Symphony Woods Road, Suite 312, Columbia, MD 21044 · (714) 658-4912 · tweiner@twteam.com · Verify licensing at nmlsconsumeraccess.org. Licensed to originate residential mortgage loans in California.
Not a government agency. The TW Team at Lower is not affiliated with, acting on behalf of, or endorsed by HUD, the FHA, the VA, the USDA, the FHFA, Fannie Mae, Freddie Mac or any other government agency. This page is not a government publication and has not been reviewed or approved by HUD, by the FHA, by the VA, by the USDA or by any other government agency. FHA loans are insured by the Federal Housing Administration and VA loans are guaranteed by the Department of Veterans Affairs; both are originated by approved lenders, not by the agencies themselves.
This calculator is an educational estimate based on figures you enter. It is not a rate quote, an offer of credit, a commitment to lend, or a recommendation to refinance or to consolidate debt. No rate on this page is offered or available; every rate field opens on an example figure you are expected to replace, and nothing on the page adjusts one. Consolidating consumer debt into a mortgage converts unsecured obligations into debt secured by your home, and the page states that plainly rather than in a footnote.
Nothing here is tax advice. Interest on the consolidated portion of a mortgage is generally not deductible as home acquisition debt, because the funds were not used to buy, build or substantially improve the residence. No deduction is assumed anywhere in these calculations. Consult a tax adviser about your own circumstances.
Keep things as they are. The existing mortgage is amortised over its remaining term. Each consumer debt is run at the monthly payment you entered until the balance clears, rather than amortised over an assumed term, which is how a revolving balance actually behaves. Where a payment does not exceed the monthly interest, the page reports that the balance never clears rather than producing a figure.
Consolidate. A single new loan equal to the existing mortgage balance plus the consumer balances plus the financed costs, amortised over the new term at the rate you entered.
Consolidate and redirect. The same new loan, with the entire monthly saving applied as additional principal every month. Total household outgoings are identical to the first column by construction.
Total interest figures are over the life of each structure. Figures over a holding period follow the convention used across this suite: everything paid plus everything still owed at the end of the period.
The page models up to four consumer debts and one first mortgage. It does not model a home equity loan or line of credit, a balance transfer, a personal loan, a second lien left in place behind the new first, minimum-payment behaviour on revolving accounts, promotional rates that expire, variable rates on any of the debts, or prepayment penalties.
It does not model mortgage insurance, which would apply above 80% loan-to-value and would materially change the result, nor the pricing difference between a cash-out and a rate-and-term refinance, the rate you enter is taken at face value, and a cash-out rate is normally higher.
It assumes the consumer balances are paid in full at closing and do not return. That assumption is the most consequential one on the page and the least likely to hold; the page says so in the results rather than here.
No tax treatment is modelled and no deduction is assumed. No change in credit score is predicted, in either direction.
⌂ Equal Housing Opportunity. Lower, LLC is an Equal Housing Lender. We do business in accordance with the Federal Fair Housing Act and the Equal Credit Opportunity Act.
Cash-out loan-to-value limits and agency guidance current as of September 2026.