Debt Consolidation


Rolling everything into one payment can mean the difference between getting on top of debt and juggling payments for years. But is it really worth stretching your payments out over a longer term – Don’t you pay more in interest?


Is it worth it?

Everyone’s situation is a little bit different. If you have equity in your property you can usually consolidate debt – and if so it’s generally at a much lower rate.


Case Study: how you can take 6 years off your mortgage by consolidating debt and still reduce your repayments


The Story:

A young Wellington couple who refinanced recently were able to save money by combining their credit cards into the home loan. Since moving into the home they had started a family and run up some credit card debt – some of which was incurred when they initially furnished the property after moving in and the majority when they were down to one income with their newborn.


The Numbers:

  • A home loan of $350,000 (repayments of $1929/month on their expiring two year fixed rate of 4.8%) with a full loan term of 27 years to run.
  • $15,000 on credit cards (minimum combined repayments of $350/month and a rate of 19.9% on one card) – making only the minimum repayments would mean it would take until 2025 to repay both cards.

Total monthly repayments of $2215/month.


The Result:

Their property was worth close to $500,000 so with comfortable equity in the property and the benefit of moving to a much lower fixed rate of 4.10% they were able to set monthly repayments at $2163 and take their loan term down to 21 years.


Not enough equity? You can split with a personal loan

Your Home Loan partners with personal loan providers with rates from 9.9%. It can give you the extra flexibility you need.

Personal loans can also be useful if you are trying to preserve equity in your property for future investment or renovations.