Debt Consolidation Mortgage Loans in Canada
Reduce your monthly payments with a debt consolidation mortgage loan
One of the most popular forms of debt consolidation loans in Canada is a debt consolidation mortgage loan on your home. In Canada, lenders will provide you with a mortgage (a loan against your house) for up to 95% of the value of your home.
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If you own a house, you may be able to significantly reduce your debt payments by refinancing your existing mortgage, or taking out a second mortgage on your home. Here's an example: John and Jane Smith own a house worth $170,000. They have a $100,000 mortgage. They also have $25,000 in credit card debts. The credit cards have an annual interest rate of 18%, so John and Jane are paying $375 per month in interest alone on these credit cards every month. |
If John and Jane were to negotiate a second mortgage on their house for $25,000, at an interest rate of 5%, amortized over 15 years, their payments would fall to under $200 per month.
What's so great about that? The $200 payment per month includes both principal and interest, so not only are they saving in interest costs, they will actually pay the debt off with a smaller payment than they are making now for just interest payments.
How much can you save with a debt consolidation mortgage?
To determine how much you can save by using a debt consolidation mortgage to pay off high interest rate debt, try our free mortgage payment calculator.
Frequently asked questions about mortgages
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I'm behind on my mortgage payments: what can I do about my mortgage arrears? |
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Can I get a mortgage if I have bad credit? |
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Can I get a mortgage if I was previously bankrupt? |
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What is a mortgage amortization period, and why does it matter? |
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I'm in financial trouble - should I apply for a debt consolidation mortgage? |
Additional information on debt consolidation & mortgages
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Listen to moneyproblems.ca radio show discussing financial problems and home ownership. |
For more details on debt consolidation mortgages in Canada you can talk to your local bank or, to find out if you qualify, contact a Mortgage Broker in your area.
Finally, to determine if you qualify for a debt consolidation mortgage loan, fill out a pre-approval mortgage application.