What is debt consolidation?
Debt consolidation means adding some or all of your existing unsecured debts — such as credit cards, loans or store cards — into your mortgage, so you have one single monthly payment instead of several separate ones.
How it works
- Your mortgage balance increases.
- Your monthly mortgage payment may change.
- Your unsecured debts become secured against your home.
This means your home could be at risk if you do not keep up repayments.
Why we show you six illustrations (ESIS documents)
To help you make an informed decision, we provide six mortgage illustrations showing the cost with debt consolidation, the cost without it, and the difference when lender fees are added to the loan or paid separately — so you can compare every option side by side.
Key things to consider
Secured vs unsecured debt
Credit cards and personal loans are not linked to your home. Once consolidated into your mortgage they are secured against it — your monthly payments may reduce, but your home is at risk if repayments are not maintained.
Total cost over time
Even where the monthly payment is lower, the total amount repaid may be higher, because a mortgage is usually repaid over a much longer term. We will show this clearly in the illustration comparisons.
Lender fees
Some products include fees. We will show you the difference between adding the fee to the loan, paying it upfront, and choosing a no-fee product, so you can see which is most cost-effective for you.
When it may — or may not — be right for you
- It may suit you if you want lower monthly outgoings, a single simpler payment, improved cashflow or reduced financial stress.
- It may not suit you if you are close to repaying your unsecured debts, you do not want more debt secured against your home, or the long-term cost outweighs the short-term benefit.
Our commitment to you
- Explain all your options clearly.
- Show you all six illustrations.
- Discuss the risks and the benefits.
- Make sure you understand the implications.
- Recommend the option that best meets your needs.
Download the factsheet
Our client factsheet, “Debt Consolidation — What You Need to Know”, covering everything above in a printable format.
Open the debt consolidation guide (PDF)This guide is for informational purposes only and was accurate at the date of publication. Please seek personalised advice before making financial decisions.
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