Consolidate debt to help pay your mortgage faster

If you’re juggling multiple debts, one way to simplify your finances is to bring all your loans together. This is what’s known as debt consolidation. Not only could it make managing your finances easier, if you structure your repayments in the right way, it could also save you some money and even help you pay your mortgage faster.

3.5 min read

What’s debt consolidation and what are the benefits?

Debt consolidation is when you combine your outstanding debts into one loan, rather than paying off different loans separately like your credit card, personal loan and car loan at different interest rates – and sometimes with different lenders.


  • You can just have one loan – meaning just one regular repayment
  • You’ll only have one interest rate
  • You won’t have to worry about different fees for different loans
  • If you roll all your debt into your home loan, you could pay less interest each month (as home loans typically have a lower interest rate)
  • If you adjust your loan repayments to be the same as what you were paying for all your individual debts, you could pay off your mortgage faster.

What options do I have and what do I need to consider?

1. Consolidate into your home loan

One of the biggest potential benefits of consolidating into your home loan is having just one repayment to monitor in addition to saving on interest, which can help make managing your finances easier. You could even put what you save on interest towards making extra home loan repayments.

However, keep in mind that you might end up paying more interest in the long term – home loans have a longer loan term, which means a greater amount of repayments over time.

Use our extra repayments calculator to see how much money and time you could save by making extra home loan repayments.

2. Consolidate into one personal loan

Consolidating your debts into one personal loan could potentially save you money by eliminating multiple fees across multiple debts. And if you find a loan with a lower interest rate than the one on your existing debts, you’ll be paying less in monthly interest.

What else to consider

  • If you consolidate into your home loan, your other debts will be added on to the home loan, so be aware that your home loan balance will increase
  • Rolling other debts into your home loan will likely affect your loan to value ratio (LVR). This could end up changing your interest rate
  • You should make sure that your debt consolidation doesn’t increase you above an 80% LVR, otherwise you will need to pay Lenders Mortgage Insurance (LMI)
  • If you’ve already started paying your mortgage and you then consolidate your personal debt into your mortgage, any equity you may have gained in your property will decrease
  • Every situation is different, so make sure you explore what’s best for you personally.

Frequently asked questions

Don’t worry if you have debts with multiple financial providers. You can still consolidate them into one loan. For example, if you have a personal loan with a different provider to your home loan, you can consolidate your debts and essentially pay off the personal loan by adding it to your home loan.

You can consolidate your credit card, personal loan, car loan and home loan into the same loan.

If you have multiple credit cards, including one with another bank, you can transfer the balance into your existing credit card with us – it’s called a balance transfer. This is another way to help simplify your finances and repayments. Find out more about balance transfers.

About this article

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Keep reading

See the little and big changes you can make to pay off your home loan sooner.

Thinking of switching home loans? Find out what's involved in making the switch.

Thinking about consolidating your debt?

The first step is to talk to a Home Lending Specialist. With their expertise in home loans and lending, they’ll be able to answer your questions and help you go through your options.

Get in touch and they’ll get back to you. You can talk on the phone, meet at a branch, or have a Mobile Lending Manager come to you.

The information contained in this article is of a general nature and is not intended to be nor should it be considered as professional advice. You should not act on the basis of anything contained in this article without first obtaining specific professional advice. Also to the extent permitted by law, Bankwest, a division of Commonwealth Bank of Australia ABN 48 123 123 124 AFSL / Australian credit licence 234945, its related bodies corporate, employees and contractors accept no liability or responsibility to any persons for any loss which may be incurred or suffered as a result of acting on or refraining from acting as a result of anything contained in this article.