Refinance Your Home Loan to Consolidate Debt in Australia (2026): What It Saves, What It Costs and Which Debts Lenders Fold In
Yes. You can refinance your home loan to consolidate debt in Australia: the new loan, or a top up with your lender, covers the mortgage plus the cards, personal loans and car loan you want paid out at settlement. The trap is the term: a lower repayment run over the rest of a home loan can cost more interest overall. Everstone Finance, former bankers, places the file with the lender whose rules fit your debts and keeps the folded amount on a short timetable; the lender decides each file.
- What it is: Moneysmart’s definition: you roll several debts into one new loan and make one regular repayment to one lender; a refinance is one way to do it.
- How it is assessed: in full, on the combined amount, at the lender’s rate plus at least 3 percentage points (APRA, 28 May 2026); outside the lighter like for like tests.
- The saving and the trap, in our illustration: $65,000 of debts cost about $424 a month over 30 years inside a home loan instead of $1,488, but $63,304 more interest unless the folded amount is cleared in five years.
- Which debts: credit cards, personal loans, store cards, buy now pay later and car loans on Moneysmart’s list; some specialist lenders’ pages add tax and business debts.
- Which lender: no single one. The file goes to the lender whose rules fit the debts you have, and the lender decides each file.
Paying three or four lenders every month while the balances stand still? One home loan repayment could carry them, on a timetable you choose.
Tell Ahmed, a former banker, the balances, the rates and what each debt costs you a month. You hear whether your equity and income carry the combined loan, which lender’s rules fit your debts, and what the folded amount costs over the full term against five years.
Book a debt consolidation callCan you refinance your home loan to consolidate debt in Australia?
Yes. Moneysmart defines it in one line: debt consolidation means you roll several debts into one new loan and then make one regular repayment to one lender, and refinancing, with the same lender or a different one, can be used to do it.
This guide is about folding debts into a home loan on property in Australia; a consolidation personal loan is a different product and nothing here is about it.
The mechanics are much the same from lender to lender. Westpac’s page on using a loan increase to consolidate debt describes them: once the increase is approved, the bank pays off the debts you want consolidated, with it or with other lenders, and adds what you still owed to your home loan balance. The money you owed does not disappear; it moves onto a loan secured by your home.
Staying or moving is weighed in our guide to refinancing with the same bank or switching; the process from application to settlement is in our guide to refinancing a home loan.
Is consolidating debt into your mortgage a good idea? Moneysmart’s four tests
It is a good idea when it passes four tests and a poor one when it fails them. Moneysmart’s debt consolidation page, last updated 31 August 2026, warns that rolling several debts into one loan can cost you more and risk the asset the debt is secured against, and sets four tests:
- You pay less overall. The interest rate and fees on the new loan are lower than on your current debts.
- You have a clear end date. The new loan term is not longer than your current debts.
- You can afford the repayments. The new repayment fits your budget and you can keep paying it.
- You stop using old credit. You close or reduce old credit cards or other loans, and do not take on new debt.
Moneysmart’s conclusion: if some of these things are not true, consolidation can make your situation worse, not better.
A home loan refinance passes the first test on rate; the fees below decide the rest. The second test is the one a consolidation fails whenever the folded amount is left to run for the life of the home loan. The third is the lender’s serviceability test, below. The fourth is yours: the cards get closed. So the answer for a home owner with equity and expensive unsecured debt is to refinance, and to build the structure so that all four tests hold.
What it saves and what it costs over time: a worked example on $65,000 of debts
Our own arithmetic on round balances. The credit card rate is the Reserve Bank’s published standard rate, 21.24 per cent for September 2026. The personal loan and car loan rates are illustrative, not a published average: the Reserve Bank stopped publishing its personal loan indicator in February 2020, when the unsecured fixed figure stood at 12.46 per cent, and has no car loan series. The home loan rate is an illustrative 6.80 per cent, the Reserve Bank’s discounted variable average for the same month, not the rate of any lender. Three debts, each being repaid over five years:
| Debt (our illustration) | Rate used | Over five years |
|---|---|---|
| $15,000 credit card | 21.24% (RBA standard credit card rate, September 2026) | $408 a month; $9,470 interest |
| $20,000 personal loan | 12.46% (illustrative, not a published average) | $450 a month; $6,973 interest |
| $30,000 car loan | 9.50% (illustrative, not a published average) | $630 a month; $7,803 interest |
| $65,000 together | the three rates above | $1,488 a month; $24,246 interest |
Now fold the same $65,000 into a home loan at the illustrative 6.80 per cent. What happens next depends only on how long it is allowed to run.
| The same $65,000 inside a home loan at an illustrative 6.80% | Each month | Interest on it |
|---|---|---|
| Left to run for 30 years | $424 | $87,550 |
| Left to run for 25 years | $451 | $70,344 |
| Cleared in five years, repayments kept up | $1,281 | $11,857 |
Left to run for 30 years, the folded $65,000 costs about $424 a month: $1,064 a month less going out than the three repayments together. The interest on it, though, comes to $87,550 instead of $24,246, $63,304 more over the life of the loan: the trap Moneysmart and ASIC describe, in figures.
Kept on its old five year timetable, at $1,281 a month, the same $65,000 costs $11,857 in interest, $12,389 less than the three debts would have cost, and the monthly outlay is still $207 lower. That is the consolidation refinance that passes all four tests, and the one Everstone Finance builds: a separate split with its own short term, or repayments held at the level you pay today.
The method: the monthly rate is one twelfth of the annual rate; each repayment is the level principal and interest repayment that clears the balance over its term, shown rounded to the nearest dollar; interest is total repayments less the amount borrowed, worked before rounding and then rounded; the monthly total and the differences are taken between the figures shown. The three illustrative rates are not the rate of any lender; no fees are included.
What would folding your debts into the home loan change?
Starts on the worked example, on a $600,000 home loan. Enter any figure. Arithmetic on a principal and interest basis over the years you enter, not an offer; the rate is yours, not the rate of any lender.
Home loan repayment $3,912 becomes $4,335 over 30 years. The folded $65,000 costs about $87,550 in interest over 30 years at 6.80%, against $11,857 if it is cleared in five years.
Put these figures to a former bankerWhich debts can you consolidate into a home loan? What nine lenders’ pages say
Moneysmart’s list runs from credit cards and personal loans to store cards, buy now pay later and car loans. The lenders’ own pages, read on 17 October 2026, name a similar list for a home loan, and a few specialist lenders go further. None is named here as the lender Everstone Finance uses: that choice is made on the file.
| Lender page | Debts its page names | Its conditions, in its own words |
|---|---|---|
| CommBank, refinancing and top up pages, refinance guide | Car loan, personal loans, credit cards | It may be possible to refinance these debts into your existing home loan; how much depends on your equity and financial situation; its fast settlement route excludes a refinance whose sole purpose is unsecured debt. |
| Westpac, loan increase for debt consolidation page | Personal loans, credit cards, car loans | If you have home equity, you may be able to use it; usable equity is a set share of the property’s value less the loan balance; consolidating can have the effect of extending the term, which is likely to mean more interest over time. |
| NAB, top up page | Personal loan, car loan, credit card | A top up borrows against equity, depending on how much you have and your financial situation; most of its variable products qualify if you can cover the higher repayments; a top up does not change the loan term. |
| ANZ, your loan and refinance pages | Any other debts you may have | You might be able to use your equity to consolidate; a top up on a variable rate loan is subject to credit approval; its app based home loan does not lend for debt consolidation for now. |
| ING, reasons to refinance page and help article | Credit card debt, personal loans, car loan | Consolidating them into the one loan is listed as a reason to refinance; its help article warns that a longer term can mean more interest even at a lower rate. |
| Pepper Money, refinance and variable rate pages | Credit cards, personal loans, car loans, private finance, tax and other personal or business debts | Debts can be consolidated so long as it puts you in a better financial position; some products may limit the number of debts; payment of tax debts considered; its loan limits are subject to credit assessment, eligibility criteria and lending limits. |
| Liberty, debt consolidation home loans page | Credit cards, personal loans, car loans, tax debt | Multiple debts can be consolidated as long as the outcome puts you in a better financial position. |
| Bluestone, refinancing and owner occupier pages | Debts including ATO debt and business loans | Unlimited debt consolidation, footnoted as subject to eligibility and approval criteria; applications with an imperfect credit history considered. |
| Brighten, full doc page | Unsecured debts; tax debts in one tier only | The number of unsecured debts and whether a tax debt is among them decide which of its two tiers a file sits in. |
A car loan may be secured on the car; paid out from the home loan, that debt sits against your home instead. A tax debt is its own case: some specialist lenders’ pages name tax debts and the major banks’ pages do not, and the subject, including the lenders Everstone Finance uses for it, is in our guide to refinancing a home loan to clear an ATO tax debt. Whether any interest on a consolidated amount is deductible, for instance on an investment property loan, is a question for a registered tax agent.
How much debt can you consolidate into your home loan? Equity and the serviceability test
Two limits set the amount, and the lower one wins.
Equity. Every top up page describes the same method: the lender values the property, subtracts what you owe and lends against part of the difference, usually up to the point where you still hold 20 per cent equity, the line below which Moneysmart’s switching page says lenders mortgage insurance may apply. On that line a home worth $800,000 with $500,000 owing has room for about $140,000, our own round figures.
Serviceability. A consolidation refinance is a new credit contract and is assessed in full on the combined amount. The Australian Prudential Regulation Authority kept the mortgage serviceability buffer at 3 percentage points in its media release of 28 May 2026, so the lender tests whether your income carries the repayment on the whole new balance at its rate plus at least that buffer, after living costs and any debts you are not folding in. A consolidation sits outside the lighter tests some banks apply to a straight refinance of the same loan; the conditions reported for those tests in 2023 excluded it, as our guide to like for like refinances and the serviceability buffer explains. ASIC’s responsible lending guide adds that a lender’s inquiries are likely to be greater where a consumer is refinancing, and that where a borrower in repayment difficulty refinances, the new loan is taken to be unsuitable if its repayments are at the same or a similar level, so the consolidation has to lower them. ING’s help article says large credit card debts or limits could affect your history, and suggests paying cards down and lowering limits before you apply.
The way through is the file’s structure: the repayments you fold in stop. Our borrowing power calculator shows roughly where a combined balance lands; where the file carries defaults, our guide to bad credit home loans covers which lenders consider an imperfect history.
Will your repayments go down? Yes, and the term trap in the regulators’ own words
Usually, yes: the combined monthly repayment falls because the home loan rate is lower and the term is longer, though the Helpline notes it is not always the case.
Moneysmart’s current wording: debt consolidation (or refinancing) can make it easier to manage your repayments, but it may cost you more if the interest rate or fees (or both) are higher than before, and it could also cost you more if the amount of time you take to pay off the loan is longer. And: be cautious of switching to a loan with a longer term; the interest rate may be lower, but you could pay more in interest and fees in the long run. Its own table shows a $20,000 debt costing $25,496 in total at 10 per cent over 5 years and $30,379 at 6 per cent over 15 years: the weekly repayment falls and the total cost rises.
ASIC’s responsible lending guide, reissued in March 2025, puts the same test on the lender in its own words: where the repayments under the new loan are lower because the overall term will be longer, and the loan may ultimately cost more in interest, the lender should find out whether the consumer understands this and that it is consistent with their requirements and objectives.
Whether the term stretches at all depends on the route. NAB’s top up page says topping up will not impact your loan term, and Westpac’s help page says mortgage repayments usually increase to pay off the amount within your remaining loan term; a refinance to a new lender is written for a new term, which is where the stretch comes from. Moneysmart’s home loan pages add that a longer loan term, for example 30 years, means lower repayments but more interest, and that you should negotiate a loan with a similar length to your current one.
What does it cost to consolidate debt into a home loan? Switching costs
A consolidation refinance carries the switching costs of any refinance. Moneysmart’s switching page, last updated 29 July 2026, lists a break fee if you leave a fixed rate early, a discharge or termination fee when you close your current loan, an application fee at the new lender, a switching fee if you refinance with your own lender, and stamp duty, which it says you may be liable for and should check with your lender. Its debt consolidation page tells you to ask the new lender for all fees and charges, including application, legal and valuation fees. The debts being paid out can carry a cost of their own: a personal loan can have a break fee, a cost CommBank’s refinance guide shows being weighed in its case study.
Government fees are set by each state and territory registry and, in the states read for this guide, change on 1 July; two are verified here. In New South Wales, the Land Registry Services schedule from 1 July 2026 sets a discharge of mortgage at $166.60 excluding GST, $182.73 including GST, and a mortgage registration at the same, each including a $5.35 levy to the Torrens Assurance Fund, so a switch lodges $365.46 including GST. In Western Australia, Landgate’s fees from 1 July 2026 are $225.10 for a discharge and $225.10 for a mortgage, $450.20 for the pair, not subject to GST. Settlement usually runs through PEXA, which charges its own service fees, separate from the registry’s; other states’ figures are confirmed on the file.
Lenders mortgage insurance applies where the combined loan takes you past the lender’s equity threshold: Moneysmart’s switching page says that with less than 20 per cent equity you might have to pay it. Break costs on a fixed rate, the full fee list for a plain refinance and borrowing against equity for any purpose each have their own guide: home loan break costs, the cost of refinancing a home loan and cash out refinancing. Every fee goes beside the saving in writing before you decide.
Unsecured debt becomes secured debt: the home at risk, and the schemes to avoid
Moneysmart and the National Debt Helpline both carry this warning, in their own words. Moneysmart: turning unsecured debts, such as credit cards or personal loans, into a single secured debt means putting up an asset such as your home or car as security, so that if you can’t pay off the new loan, the home or car you put up may be at risk, and the lender can sell it to get back the money you borrowed. The National Debt Helpline, the free, not-for-profit financial counselling service, says the same of increasing your home loan to pay out credit card debts: the asset given as security will be on the line if things go wrong, and short term debt may become long term debt. Westpac’s help page adds the line worth remembering: debt consolidation is not debt elimination or forgiveness.
The Helpline also says a borrower already in financial hardship usually cannot get a new loan to consolidate, because they are already struggling to make repayments, while its home loans page lists consolidating debts among the options a lender’s hardship team can offer.
Two cautions. First, there is no Australian government debt consolidation loan; what exists is free, confidential financial counselling through the National Debt Helpline, a not-for-profit service. Second, the Helpline warns of consolidation that is in fact a Part IX debt agreement under the Bankruptcy Act, and of schemes where you pay set up fees and never get a loan. Its rule is to deal only with a credit provider or broker that is licensed by ASIC or is an authorised representative of someone who is licensed; Moneysmart adds: walk away from anyone who will not put all loan costs and the interest rate in writing before you sign. Everstone Finance’s credit representative and licence numbers are at the foot of this page.
Ready to put your debts under one roof without stretching them over thirty years? See the monthly saving and the lifetime interest side by side.
Have your home loan statement and each debt’s latest statement to hand; Ahmed prices the new repayment, the switching costs and the five year plan against what you pay now, as a former banker reads a file, before any lender is asked.
Run the numbers on my debtsHow Everstone runs a debt consolidation refinance
Ahmed Lotfi, a former banker, works through these in order before anything is lodged.
- The first conversation. By phone or video: the home loan balance and rate, the property’s rough value, and each debt’s balance, rate, term and repayment. Nothing to send.
- The two limits and the structure. Your equity against the ceiling, the combined repayment at the lender’s rate plus the buffer against your income and living costs, and the folded amount on a short timetable, as a separate split or by holding repayments at today’s level.
- The lender. Everstone Finance names no single lender for this. The file goes to the lender whose rules fit the debts.
- Costs in writing. Discharge, break, application, valuation and registry costs beside the monthly saving and the lifetime interest, both ways: run for the full term, and cleared in five years.
- Application and settlement. The lender assesses the whole new loan and decides. If it approves, the debts are paid out at settlement and you close the cards and loans yourself.
The decision is the lender’s on every file. If you have been told your debts stop you refinancing, bring that answer with you. To start, book a time with Ahmed; the calendar shows times in your own time zone.
Frequently asked questions
Can I consolidate debt into my mortgage in Australia?
Yes. A refinance, or a top up with your current lender, is written for your mortgage plus the cards, personal loans and car loan you want paid out, which are settled from the new loan. The lender assesses the whole new amount and decides each file. The balance moves onto a loan secured by your home; it does not go away.
Is consolidating debt into a mortgage a good idea?
It is when the four Moneysmart tests hold: you pay less overall, the new loan has a clear end date no longer than your current debts, the repayment fits your budget and the old cards are closed. A lower rate alone is not enough, because a small repayment stretched over a long home loan term can cost more interest in total.
How much debt can I consolidate into my home loan?
No lender page we read prints a single limit. Two things set it: your equity, and whether your income carries the combined loan at the assessment rate. Lenders commonly lend up to the point where you keep 20 per cent equity, the line below which Moneysmart says lenders mortgage insurance may apply. The lender decides the amount on your file.
Does consolidating debt affect serviceability and borrowing power?
Yes. A consolidation refinance is assessed in full on the combined amount, with repayments tested at the rate of the loan plus a buffer of at least 3 percentage points, the setting APRA kept in May 2026, and it sits outside the lighter like for like tests some banks apply to a straight refinance of the same loan. In its favour, the repayments on the debts you fold in stop.
Which debts can be consolidated into a home loan?
Moneysmart names cards, personal loans, store cards, buy now pay later and car loans. The major bank pages read for this guide name credit cards, personal loans and car loans; some specialist lender pages add tax debts, private finance and business debts. A tax debt has its own guide on this site.
What does it cost to consolidate debt into a home loan?
Switching costs: a discharge fee at the lender you leave, a break cost if part of the loan is fixed, fees at the new lender, and the government fees to discharge the old mortgage and register the new one, which from 1 July 2026 are $182.73 including GST each in NSW and $225.10 each in Western Australia. Lenders mortgage insurance can apply below the usual equity threshold, and Moneysmart says stamp duty may apply in some cases.
Will my repayments go down if I consolidate debt into my mortgage?
Usually, though the Helpline notes it is not always the case: the monthly total falls because a home loan rate is lower than a card rate and the term is longer. The catch is the term. In our illustration the folded amount costs $63,304 more in interest over 30 years than the three debts would have cost over five, and $12,389 less if it is cleared in five years at $1,281 a month. Lower repayments and lower cost are not the same thing.
Sources
- National Debt Helpline, Consolidate your loans (page metadata 5 April 2023; home at risk, hardship, Part IX and set up fee warnings, the licensing rule, not-for-profit, free and confidential): ndh.org.au, read 17 October 2026
- National Debt Helpline, Home loans (modified 14 March 2024; consolidation among the hardship options): ndh.org.au, read 17 October 2026
- Commonwealth Bank, refinancing and increasing your home loan pages (consolidation offered): commbank.com.au and commbank.com.au; refinance guide, undated (personal loan break fee in its case study; rate not used): commbank.com.au; FASTRefi guide (sole purpose unsecured refinance excluded): commbank.com.au; each read 17 October 2026
- Westpac, loan increase for debt consolidation page (hedge, debts named, usable equity method, term effect; the share is not printed here): westpac.com.au; loan increase page: westpac.com.au; how to consolidate debt help page (remaining loan term; not debt elimination or forgiveness): westpac.com.au; each read 17 October 2026
- NAB, home loan top up page (correct as at July 2025; equity method, variable products, term unchanged; the share is not printed here): nab.com.au; why refinance page (debts named): nab.com.au; each read 17 October 2026
- ANZ, your loan page (top up subject to credit approval): anz.com.au; refinance home loan page: anz.com.au; ANZ Plus refinance options page (no additional funds for debt consolidation for now): anz.com.au; each read 17 October 2026
- ING, reasons to look at refinancing page: ing.com.au; help hub article dated 2 June 2026 (the longer term warning; card debts and limits): helphub.ing.com.au; each read 17 October 2026
- Pepper Money, refinance page (better financial position test, debts named, fees not added to the balance): peppermoney.com.au; variable rate page (tax debts considered; loan limits subject to credit assessment, eligibility criteria and lending limits; figures not used): peppermoney.com.au; refinancing fees page: peppermoney.com.au; each read 17 October 2026
- Liberty, debt consolidation home loans page (effective as at 16 October 2026; better financial position test, debts named; figures not used): liberty.com.au, read 17 October 2026
- Bluestone, refinancing page (unlimited consolidation including ATO debt and business loans; imperfect credit considered): bluestone.com.au; owner occupier home loans page (rates as at 17 August 2026; the eligibility footnote; figures not used): bluestone.com.au; each read 17 October 2026
- Brighten, full documentation home loans page (modified 5 October 2026; the two tiers; counts and bands not printed): brighten.com.au; alternative documentation page (its feature box shows the same tier wording; its FAQ answer renders incomplete): brighten.com.au; each read 17 October 2026
- Moneysmart (ASIC), Debt consolidation and refinancing, last updated 31 August 2026 (definitions, four tests, secured debt and longer term warnings, fee checklist; its $20,000 table, recomputed): moneysmart.gov.au, read 17 October 2026
- Moneysmart, Choosing a home loan, last updated 16 September 2026 (shortest term you can afford; 30 years as the longer term example): moneysmart.gov.au, read 17 October 2026
- Moneysmart, Switching home loans, last updated 29 July 2026 (fees named, a similar loan length, lenders mortgage insurance under 20 per cent equity): moneysmart.gov.au, read 17 October 2026
- ASIC, Regulatory Guide 209, Credit licensing: Responsible lending conduct, issued December 2019 and reissued March 2025 (inquiries when refinancing, the same or similar repayments test, the longer term understanding test): asic.gov.au, read 17 October 2026
- Australian Prudential Regulation Authority, media release of 28 May 2026 (the buffer kept at 3 percentage points): apra.gov.au, read 17 October 2026
- Reserve Bank of Australia, Statistical Table F5, published 8 October 2026 (card 21.24 per cent and discounted variable 6.80 per cent, September 2026; personal loan series last populated February 2020 at 12.46 per cent; no car loan series): rba.gov.au, read 17 October 2026
- NSW Land Registry Services, fees from 1 July 2026 (discharge of mortgage and mortgage registration each $182.73 including GST, with the $5.35 levy): nswlrs.com.au, read 17 October 2026
- Landgate (Western Australia), fees from 1 July 2026 (discharge and mortgage $225.10 each, not subject to GST): landgate.wa.gov.au, read 17 October 2026
- PEXA, pricing page (its own service fees, separate from registry fees; figures not printed): pexa.com.au, read 17 October 2026
- Worked example and calculator: our own arithmetic. $15,000, $20,000 and $30,000 at 21.24, 12.46 and 9.50 per cent over five years; $65,000 at 6.80 per cent over 30, 25 and five years; a $600,000 home loan at 6.80 per cent before and after adding $65,000; repayments shown rounded, interest worked before rounding; the equity illustration keeps 20 per cent equity on an $800,000 home with $500,000 owing. The three illustrative rates are not the rate of any lender.
Lender names on this page identify the lenders whose public pages are quoted, each in its own hedge words on the date shown; no rate, fee, loan to value, dollar cap or debt count from any lender is used, and no lender is named as the one Everstone Finance places debt consolidation refinances with, because that choice is made on each file. Everstone Finance is not affiliated with, endorsed by or acting on behalf of any lender named here.