Bundling Your Debts Into One Payment With a Refinance

If you're juggling a mortgage, credit cards, a car loan, and maybe a line of credit, keeping track of it all can feel overwhelming, and expensive. Refinancing offers a way to simplify things by bundling your debts into one payment. Here's how it works and why so many homeowners find it appealing.

What "bundling your debts" actually means

When you refinance, you can choose to borrow a bit more than your current mortgage balance and use that extra amount to pay off other debts, like credit cards or a car loan. Once that's done, instead of juggling several different payments each month, you're left with one single mortgage payment.

Why homeowners like this approach

• One payment is simpler to manage. Instead of tracking due dates for several bills, there's just one.
• Mortgage rates are often lower. Credit cards and some loans carry high interest rates.
• Mortgage rates tend to be significantly lower, which can mean real savings over time.
• It can free up monthly cash flow. Combining several payments into one, often smaller, mortgage payment can leave more room in your monthly budget.
• Less stress. There's real peace of mind in having one clear payment instead of a handful of moving pieces.

A simple example of how it plays out

Say a homeowner has a mortgage payment, a car loan, and a couple of credit cards with high interest rates. By refinancing and rolling those other debts into the mortgage, they end up with one monthly payment instead of four, often at a lower overall interest cost.

Something worth keeping in mind

Rolling other debts into your mortgage does mean you're paying them off over a longer period of time, which can mean more interest paid overall on those amounts. It's a trade-off between simplicity and speed, and it's worth understanding both sides.

Is this the right move for you?

If you're feeling stretched thin by multiple payments, bundling your debts through a refinance could bring some real relief, both financially and mentally. But every situation is different, and it helps to look at your actual numbers before deciding.

Reach out to Ken Tucker to discuss your unique situation and see what bundling your debts could look like for you. 

Book a free call by clicking here or call 416-988-5626.

Learn more about how refinancing can help in our Refinance blog series here.