Juggling a few credit cards, a personal loan and maybe a car loan on top of your mortgage? A debt consolidation loan rolls all of that into a single repayment — and if it’s done through your home loan, at a fraction of the interest rate you’re currently paying. Available Australia-wide.
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What is a debt consolidation loan?
A debt consolidation loan combines multiple debts — credit cards, personal loans, store cards — into one new loan with a single repayment and a single interest rate. The goal is straightforward: replace several higher-rate debts with one loan that costs you less overall, or is at least easier to manage.
There are two broad ways to do this: take out a standalone personal loan sized to clear your other debts, or roll those debts into your existing home loan through a refinance or a top-up. The second option is where the real savings usually sit, because mortgage rates sit well below what you’re paying on unsecured debt.
How does consolidating debt into your home loan work?
Rolling your debts into your home loan increases your mortgage balance by the amount you’re consolidating, then repays your credit cards and personal loans in full, so you’re left with one repayment at your mortgage rate instead of several at much higher rates. As of April 2026, the average outstanding owner-occupier home loan rate sits at 5.98% p.a., against an average credit card interest rate of 18.67% p.a. — a gap of close to 13 percentage points on whatever balance you’re carrying.
That gap is the whole point. Our brokers see this pattern often: someone is making minimum-plus repayments across two or three cards and a personal loan, and most of what they’re paying each month is interest, not principal. Moving that debt onto a mortgage rate instead of a credit card rate frees up monthly cash flow immediately, because you’re no longer paying a rate that’s three to four times higher than you need to be.
Do consolidation loans hurt your credit?
Applying for a debt consolidation loan involves a credit check, which can cause a small, temporary dip in your credit score. Over time, replacing several revolving debts with one fixed, on-time repayment tends to help your score, provided the old accounts are actually closed rather than left open and re-used.
What's the difference between a personal loan and rolling debt into your mortgage?
A standalone personal debt consolidation loan is unsecured, comes with a shorter term (typically one to seven years) and a higher interest rate than a mortgage, but doesn’t touch your home. Rolling the same debt into your mortgage gets you a lower rate and a smaller minimum repayment, spread over a much longer term, secured against your property.
Which one suits you depends on how much you owe, how much equity you have, and how comfortable you are extending that debt over a longer period — this is exactly the kind of comparison our brokers work through with you before you commit to either path.
What are the risks of consolidating debt into your home loan?
The main risk is that you’re converting unsecured debt into secured debt: moneysmart.gov.au notes that turning credit cards or personal loans into a single loan secured against your home means the home is at risk if you can’t keep up repayments, where an unpaid credit card can’t take your house. Extending the repayment term can also mean paying more total interest over the life of the loan, even at a lower rate, if you don’t keep the term tight.
It’s also easy to undo the benefit: if you consolidate and then start running the credit cards back up, you end up with the mortgage debt and the new card debt. Closing the old accounts once they’re paid out is part of doing this properly.
How much could this save you a month?
On $25,000 of unsecured debt at average rates, moving it onto a home loan rate cuts the interest-only cost from roughly $389 a month to around $125 — a saving of about $264 a month. The table below shows the maths using the published rates above; it’s a worked example, not a client result or a quote.
| Current (unsecured, blended ~18% p.a.) | Rolled into home loan (~6% p.a.) | |
|---|---|---|
| Balance | $25,000 | $25,000 |
| Approx. interest rate | 18.67% p.a. (average credit card rate) | 5.98% p.a. (average owner-occupier home loan rate) |
| Approx. minimum monthly interest cost | ~$389/month | ~$125/month |
| Indicative monthly saving | — | ~$264/month |
Is a debt consolidation loan through Click Financial right for you?
If you’re carrying credit card or personal loan debt at a much higher rate than your mortgage, and you have enough equity to absorb it, rolling that debt into your home loan is usually worth a conversation — even if you decide against it once you see the full picture, including the longer-term cost. We’re an Australian mortgage broking business built on straightforward advice, competitive rates, and putting your loan first, and this conversation costs nothing — we’re paid by the lender once your loan settles, not by you.