What this calculator answers
Moving credit card, car loan and line of credit balances into your mortgage swaps high interest rates for a mortgage rate. Your monthly payments usually drop a lot. That is real cash-flow relief, but it is not the same as saving money: debt that would have been paid off in three or four years can end up being repaid over 25.
This calculator shows three paths for the same debt: keep paying it as you are, consolidate and make only the new mortgage payment, or consolidate and keep putting what you paid before toward it. The third path is often the one that saves the most.
How the calculation works
- Each debt is paid off at its own rate and the monthly payment you enter, with interest charged monthly, to find how long it takes and the interest it costs.
- The consolidated amount (debts plus any costs you add to the loan) is run through the mortgage at the new rate, compounded semi-annually, once with the regular payment and once with your old total debt payment.
- Room to borrow uses the 80% refinance limit from OSFI Guideline B-20.
- The monthly drop compares your current mortgage payment plus debt payments with the new mortgage payment.
Assumptions and limits
- Regulation: refinances at federally regulated lenders are limited to 80% of the home value, and you must pass the stress test.
- Lender policy: the penalty, legal and appraisal coverage, rates and maximum amortization vary by lender. Defaults are examples.
- Your assumptions: the debt rates and payments you enter, and that you do not run the balances back up after consolidating.
- Interest on the existing mortgage changes too when you refinance. This tool isolates the cost of the debt; the refinance calculator shows the whole mortgage.
- Credit products differ. Some cards charge interest daily, and loans may have fixed end dates. Results are estimates.
Common questions
Does consolidating debt into my mortgage save money?
It saves on the interest rate, but whether it saves money overall depends on how fast you repay it. If you only make the lower mortgage payment, the debt is spread over many years and total interest can be higher than paying the debts off as planned.
What is the best way to consolidate?
Lower the rate, then keep paying close to what you paid before. The extra goes toward the mortgage principal through your prepayment privileges or a higher regular payment, so the consolidated debt is gone in a few years.
Do I need to break my mortgage to consolidate?
Usually, unless your term is ending. That means a prepayment penalty. Alternatives include a HELOC, a second mortgage, or waiting until renewal. The penalty calculator helps you estimate the cost.
Will consolidating hurt my credit?
The refinance involves a credit check. Over time, paying off revolving balances often helps. The bigger risk is running the cards back up, which leaves you with both the larger mortgage and new debt.
Sources
- OSFI B-20 infosheet (rules checked 2026-10-31)
- OSFI: minimum qualifying rate (rules checked 2026-10-31)
- FCAC: prepayment penalties (rules checked 2026-10-31)