How consolidation works
We add up everything you owe outside the mortgage - cards, lines of credit, car loans, tax arrears - and refinance or place a second mortgage large enough to pay all of it out on closing. Your lawyer sends the funds directly to each creditor. You are left with one mortgage payment instead of six bills at six different rates.
Does it actually save money?
Usually a lot, but only if you look past the monthly payment. The right comparison is total interest paid over the time it takes to clear the debt, plus any prepayment penalty on your current mortgage, plus legal and appraisal costs. We put both scenarios in front of you before you commit, and if consolidation does not win, we say so.
- Credit cards commonly run 19.99% to 29.99%
- Unsecured lines of credit typically sit well above mortgage rates
- Secured mortgage debt is the lowest-cost borrowing most households can access
Refinance or second mortgage
If your existing rate is unremarkable or your term is nearly up, refinancing the whole mortgage is usually cleanest. If you hold a low rate or face a large prepayment penalty, a second mortgage behind it consolidates the debt without disturbing the first. We price both.
If the bank says no
Consolidation is often needed precisely when credit has already taken damage from carrying those balances. Alternative and private lenders in Toronto will consolidate based on equity rather than score, typically as a one to two year term while your credit recovers, then we move you back to an institutional lender at a normal rate.
Frequently asked questions
- Can I consolidate credit card debt into my mortgage in Toronto?
- Yes, if you have enough equity. Institutional lenders generally allow total mortgage borrowing up to 80% of the appraised value, and the payouts go directly to your creditors on closing.
- Will a debt consolidation mortgage hurt my credit?
- There is a short-term dip from the new credit inquiry and mortgage, but paying revolving balances down to zero usually improves your score meaningfully within a few months.
- Can I consolidate CRA tax arrears?
- Yes. Many alternative and private lenders will pay out CRA arrears on closing. Most banks will not fund while a CRA lien is registered, so these files often go the alternative route.
- Can I consolidate debt with bad credit in Toronto?
- Yes. Equity-based lenders approve on the property rather than the score, which is common for consolidation files. Expect a higher rate and a lender fee, and plan an exit back to a bank.
- Is it cheaper to consolidate or keep paying my cards?
- Almost always cheaper to consolidate when the gap between card rates and mortgage rates is this wide - but only if you avoid running the cards back up. We show you the full-term interest comparison first.