Debt Consolidation · BC & Alberta · Since 2012
Debt consolidation is a tool. It is not a reset button.
Rolling credit cards, lines of credit and loans into your mortgage can lower what you pay each month. It can also cost you more over time if the debt simply comes back. Before you sign anything, you should see both sides of that math. That is what the first conversation is for.
- Direct broker communication — you’re never chasing updates
- Self-employed, newcomers, bruised credit, commercial and private
What debt consolidation actually means
You use the equity in your home to pay off higher-interest debt, and that debt becomes part of your mortgage. Several payments become one.
There is more than one way to do it, and the right one depends on your equity, your income, your credit and where you are in your current mortgage term:
Refinancing your first mortgage. Replace your mortgage with a larger one and use the difference to clear the debt. Usually the lowest borrowing cost, but breaking mid-term can carry a penalty.
A home equity line of credit (HELOC). Borrow against your equity alongside your current mortgage. Flexible, but only helps if the balance actually comes down.
A second mortgage. Leaves your first mortgage untouched, which can make sense when the penalty to break it is high.
A short-term private or alternative mortgage. For files a bank will not approve right now, with a defined plan to move back to a conventional lender.
The honest arithmetic
When it makes sense, and when it doesn't
It can make sense when:
The debt carries a much higher rate than your mortgage would
Monthly payments are squeezing your budget and you have a plan for the freed-up cash
You are already renewing or refinancing, so there is no extra penalty
Consolidating would help you qualify for something else you need
It usually doesn't when:
The penalty and fees to break your mortgage outweigh the interest you would save
The cards are likely to fill back up. Then you have the old debt in your mortgage and new debt on top
The debt is small enough to clear in a year or two on its own
You would be stretching short-term debt over 25 years and paying interest on it the whole time
If consolidating is not the right move for you, we will say so, and talk through what else might work.
- Direct broker communication — you’re never chasing updates
- Self-employed, newcomers, bruised credit, commercial and private
The costs to look at before you decide
A lower monthly payment is not the same as saving money. We put these numbers in front of you before you commit:
- Prepayment penalty if you break your current mortgage before maturity
- Legal and appraisal costs for the new mortgage
- Lender and broker fees on alternative or private files. You will see these in writing before you agree to anything
- Total interest over time. Spreading debt across a longer amortization can mean paying more in total, even at a lower rate
- Your new rate and term, and how they affect your flexibility later
Self-employed, bruised credit or already declined?
Those are the files we spend most of our time on. If your bank has said no, it may be because of how they read your income, not because there is no option at all. Some lenders assess business income differently. Some will look past a recent credit issue when there is solid equity and a clear plan.
Alternative and private options cost more and are meant to be temporary. If one fits, you will get the full cost and a plan to move back to a conventional lender before you commit, not at signing.
How it works
Twenty minutes with Dil.
We list your debts, your payments, your home's estimated value and where you are in your current term. No credit check to talk.
We run both sides of the math.
Payments now versus after, every cost to get there, and the total interest picture. If it doesn't add up, you hear that first.
We place the file and manage it to funding.
Including the lawyer paying out your debts directly at closing, so nothing is left to chance.
Related
Where people usually go next.
Mortgage Refinancing
Refinancing an existing property is how most investors fund the next down payment.
Read more →
Private & Alternative Lending
Expensive money used deliberately, for a short time, with a defined exit. And an honest answer when it does not fit.
Read more →
Self-Employed Mortgages
Investors who are also business owners face both qualification questions at once.
Read more →
debt consolidation
Common questions about debt consolidation
General information for British Columbia and Alberta, not advice on your specific situation. Whether consolidation saves money depends on your penalty, fees, rate, amortization and how the debt is managed afterward. All financing is subject to lender approval, and requirements vary by lender. No rates or savings are guaranteed.
Will consolidating debt into my mortgage save me money?
It depends. It usually lowers your monthly payments, but whether it saves money overall depends on the penalty to break your mortgage, the fees involved, and how long you take to pay it off. We show you the full comparison before you decide.
Can I consolidate debt if I'm in the middle of my mortgage term?
Often, yes. Breaking your mortgage mid-term usually carries a prepayment penalty, so we compare that against a HELOC or a second mortgage that leaves your current mortgage in place.
How much equity do I need?
It depends on the lender, the type of mortgage and your property. Federal rules limit how much of your home's value can be borrowed on a refinance. We work out your actual available equity from your property's value and current balance.
Can I consolidate debt if my credit isn't great?
Possibly. Some lenders look at equity, income and your plan, not only your score. Those options usually cost more, and we explain exactly how much before you go ahead.
I'm self-employed. Can I still refinance to consolidate debt?
Yes, many self-employed borrowers do. The question is which lender reads your business income in a way that qualifies you. That is the core of what we do.
Does consolidating debt affect my credit score?
Applying involves a credit check, and new borrowing shows on your report. Paying off revolving balances can help your profile over time, as long as those accounts don't fill back up.
Can I refinance to buy an investment property?
Frequently, yes, and it is a common way to fund a down payment elsewhere. Whether the interest is deductible depends on the use of the funds and is a question for your accountant. Lenders will also want to understand the whole picture including the property you intend to buy.
