HomePostsCan You Consolidate Credit Card Debt Into Your Mortgage?
You can use your mortgage to consolidate credit card debt.

Can You Consolidate Credit Card Debt Into Your Mortgage?

Quick answer: Absolutely you can. It’s called a cash out refinance, and for some people it’s a great option. Here’s what it boils down to: We have seen home loans typically have low monthly debt payments, and credit cards typically have high interest rates. A cash out refinance allows you to “cash out” equity in your home to pay off credit card debt. So, instead of paying a bunch of high-interest credit card debt, you would be paying one lower-interest home loan. This could free up a lot of money a month. On average, we have seen customers lowering their monthly debt payments by about $538* per month when they consolidate their high-interest debt.

Here’s the tradeoff (because of course there is a tradeoff): Cashing out the equity in your home means you’re essentially losing that equity. You’re also increasing your mortgage debt and most likely extending the length of your loan. All of these factors can vary depending on your situation, but in general, that’s what you can expect.

So, yes, you can absolutely use your mortgage to consolidate your credit card debt. Consider the advantages. Consider the drawbacks. Talk to a professional. And long story short, it’s definitely on the table.


* Average monthly debt payment reduction figures based on Mr. Cooper refinances from July – December 2017 in which a customer paid off at least one non-mortgage debt. Comparison between total minimum monthly payments before and after refinance. Individual results will vary.

** A debt consolidation refinance increases your mortgage debt, reduces equity, and extends the term on shorter-term debt and secures such debt with your home. The relative benefits you receive from debt consolidation will vary depending on your individual circumstances. You should consider that a debt consolidation loan may increase the total number of monthly payments and the total amount paid over the term of the loan. To enjoy the benefits of a debt consolidation loan, you should not carry new credit card or other high interest rate debt.