This is determined through a number of factors including your original mortgage contract date and current mortgage balance and rate.
Ratehub.ca’s debt consolidation calculator will start by showing you how much equity you have available to consolidate your various loans.
If you have a mortgage, you might look to see if you have enough equity in your home to consolidate your debt with your mortgage.
This is usually people’s preferred option since mortgage interest rates are usually much lower than other loan interest rates, and mortgages can be amortized (paid off) over 25 years.
Consolidating multiple loans means you'll have a single payment each month for that combined debt but it may not reduce or pay your debt off sooner.
This is because consolidating high interest debt – like credit card balances and auto loans – into a low interest mortgage can save you thousands in interest payments.
Mortgage loans come with the lowest interest rates because they are securitized; or in other words, they are backed by an asset – your home.
Banks and credit unions are typically only willing to lend people around 10% of their net worth (your assets minus your debts) on an unsecured basis.
So if you ask your bank for a debt consolidation loan of ,000, but your net worth is only ,000, they will probably decline your request.