Brisbane couple relaxing at home after sorting finances

Are multiple debts causing stress and costing you in high interest? Debt consolidation in Brisbane through refinancing your home loan could simplify your finances and save thousands in interest. Compare your options and connect with brokers who can assess if consolidation is right for you.

What is Debt Consolidation?

Debt consolidation combines multiple debts into one loan, typically your home loan. This can:

  • Reduce your total monthly repayments
  • Lower your average interest rate
  • Simplify finances with one payment
  • Provide a clear path to becoming debt-free

A qualified broker can assess whether consolidation makes sense for your situation.

Debts You Can Consolidate

Brisbane homeowners may be able to consolidate various debts into their mortgage:

  • Credit cards - Often 15-22% interest
  • Personal loans - Typically 8-15% interest
  • Car loans - Usually 6-12% interest
  • Store cards - Can be 20%+ interest
  • BNPL debt - Afterpay, Zip, etc.
  • Tax debt - ATO payment plans
  • Other secured loans - Various finance

How Debt Consolidation Saves Money

The savings come from the interest rate difference:

Example Scenario

Before Consolidation:

  • Credit card: $20,000 at 20% = $333/month minimum
  • Personal loan: $15,000 at 12% = $350/month
  • Car loan: $25,000 at 9% = $520/month
  • Total: $60,000 debt = $1,203/month

After Consolidation:

  • Add $60,000 to home loan at 6% over 10 years = $666/month
  • Monthly saving: $537
  • Interest saving over loan term: Thousands of dollars

A mortgage broker can calculate your exact potential savings based on your situation.

Important Considerations

While debt consolidation can help, it’s not right for everyone. Consider:

Length of Repayment

Adding debt to your home loan spreads it over a longer period. While monthly payments reduce, you may pay more total interest if you don’t make extra repayments.

Costs of Refinancing

If you’re refinancing to consolidate, consider discharge fees, application fees, and legal costs. Ensure savings outweigh costs before proceeding.

Behavioural Changes

Consolidation works best when combined with better financial habits. Without changes, you risk accumulating new debt on cleared credit cards.

Home as Security

Your home secures the consolidated debt. Missing payments could ultimately affect your home ownership.

A Responsible Approach to Debt Consolidation

A good broker will take a responsible approach:

  1. Assess your situation - Review all your debts and circumstances
  2. Calculate real savings - Show exactly what you’ll save (or won’t)
  3. Find the right solution - Refinancing, top-up, or alternative options
  4. Consider the whole picture - May suggest budgeting help or financial counselling
  5. Implement the solution - Handle the application and settlement

Alternative Debt Solutions

Debt consolidation isn’t always the answer. Alternatives may include:

  • Balance transfer credit cards - For smaller credit card debts
  • Personal loans - If you don’t have enough home equity
  • Debt agreements - For severe financial hardship
  • Financial counselling - Free services like MoneySmart

The priority should be finding the solution that genuinely helps you.

Do You Have Enough Equity?

Debt consolidation through your home loan requires sufficient equity. To consolidate $50,000 in debt, you typically need:

  • Current property value that supports the increased loan
  • Combined loan to value ratio (LVR) ideally below 80%
  • Ability to service the new loan amount

Brisbane Suburbs We Help

We connect homeowners across Brisbane with debt consolidation specialists:

  • North Brisbane: Chermside, Aspley, Nundah, Stafford
  • South Brisbane: Mt Gravatt, Sunnybank, Eight Mile Plains
  • East Brisbane: Carindale, Wynnum, Coorparoo
  • West Brisbane: Indooroopilly, Toowong, Paddington
  • Inner Brisbane: Brisbane CBD, South Brisbane, Fortitude Valley

Signs Debt Consolidation Could Help

Consider exploring consolidation if you:

  • Have multiple debts with different due dates
  • Pay high interest on credit cards or personal loans
  • Struggle to make progress on debt repayment
  • Feel overwhelmed managing multiple accounts
  • Want a clear plan to become debt-free

Signs Consolidation May Not Be Right

Consolidation may not suit you if:

  • You don’t have enough home equity
  • Your spending habits won’t change
  • Debts are small and manageable
  • You’re considering selling your home soon
  • Bankruptcy or debt agreement may be more appropriate

Free Debt Consolidation Comparison

Wondering if debt consolidation could help? Use our free comparison service to explore your options, then connect with qualified Brisbane brokers for a confidential assessment.

Get Your Free Comparison

This is general information only and not financial advice. Connect with a licensed mortgage broker for advice specific to your situation.