Popular ways
Debt Consolidation
Five repayments become one.
When credit cards, personal loans and a car loan pile up, each with its own rate, due date and minimum payment, the monthly total can feel overwhelming. Rolling those debts into a home loan at a much lower rate often cuts the monthly figure noticeably — the trade-off is total interest over the life of the loan if you don't accelerate repayments.
Things to consider
- ASIC MoneySmart warns that stretching short-term debt over a 30-year home loan can multiply total interest paid, even at a lower rate.
- If you're consolidating, pay the consolidated portion down at its old (higher) repayment amount where possible — that keeps total interest in check.
- Consolidation only works if the underlying spending habits change; otherwise the credit cards fill back up.
- The Best Interests Duty requires a broker to check consolidation genuinely leaves you better off, not just easier.
Related equity uses
Three more ways homeowners commonly put usable equity to work.
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