The arithmetic is not in dispute. Credit cards charge consumer rates. An unsecured line of credit charges less but still multiples of a mortgage. A mortgage, secured against a house, charges the least of anything available to a household.
So moving $60,000 of card and loan balances onto the mortgage takes the interest cost down enormously and reduces the total monthly outflow, often by a thousand dollars or more. On the numbers alone it is obviously correct.
And it is the transaction that most reliably brings people back three years later in a worse position than they started. That is not a reason to avoid it. It is a reason to understand what is actually happening.
What actually happens
Your existing mortgage is refinanced to a larger amount, up to eighty percent of the home's appraised value. At closing your lawyer pays out the credit cards, the loans and the lines of credit directly from the proceeds, rather than sending you the money. Those accounts go to zero.
You are left with one payment instead of six, at a much lower rate, over a much longer period.
Three things about that sentence deserve attention. The debt did not go away. It is now secured against your house, where it was not before. And it has been stretched across twenty-five years.
The longer period is where the honesty is required
Take $60,000 of consumer debt you were paying off over about five years. Consolidated onto a mortgage at a much lower rate over twenty-five years, the monthly cost drops dramatically. But paid over twenty-five years rather than five, the total interest can end up higher than what you were escaping, even at a third of the rate.
A lower rate over a much longer time is not automatically less money. It is reliably less money per month, which is a different and legitimate goal when cash flow is the actual problem.
The fix is straightforward and almost nobody does it: take the amount you were paying monthly before consolidating, and keep paying it. Direct the difference at the mortgage through your prepayment privileges. You get the cash-flow relief as insurance and clear the balance in years rather than decades. The break-even page works this through with numbers.
The behavioural trap
Here is what the numbers cannot show you.
You have just zeroed six accounts. Your credit utilisation collapses, so your credit score usually improves. Your monthly obligations drop sharply, so you feel like you have more room. And every one of those cards is still open, with its full limit available.
The single most common outcome is that balances rebuild over two or three years. Now there is a larger mortgage and the consumer debt is back. The next consolidation requires equity that may no longer exist, and this is precisely the path that ends at an alternative lender or a consumer proposal.
The counter is not willpower. It is structural: close or reduce the accounts as part of the consolidation, keeping one card for genuine emergencies. Lenders often require this anyway. If closing them feels unthinkable, that is useful information about whether consolidation alone solves the problem.
What it costs to arrange
Mid-term, the penalty is usually the largest item, and on a fixed mortgage an interest rate differential can be substantial enough to defeat the exercise entirely. Add legal fees, an appraisal, and the fact that a refinance is always uninsured and therefore priced higher than an insured mortgage.
If your renewal is within six months, wait. There is no penalty at maturity and it is the cheapest possible moment to restructure.
When it is genuinely the right answer
When the debt arose from a discrete event rather than a pattern: a period of unemployment, a medical situation, a business setback, a separation. When there is enough equity to do it without pushing to the absolute limit. When the cards get closed. And when you keep the old payment level going against the mortgage.
When it is not
When spending exceeds income structurally, because consolidation resets the counter without changing the mechanism. When there is barely enough equity, which leaves no room if anything goes wrong. When the penalty exceeds the saving. And when the real answer is a conversation with a licensed insolvency trustee rather than a broker.
That last one matters. If the debt is genuinely beyond what income can service, a consolidation converts unsecured debt, which has legal remedies, into debt secured against your home, which has fewer. There are situations where a consumer proposal is the better path, and Chad will say so.
The equity-side view of the same decision, including when there is not enough of it, is on using home equity to clear debt.