{"id":10690,"date":"2020-08-13T16:39:00","date_gmt":"2020-08-13T16:39:00","guid":{"rendered":"https:\/\/nomoredebts.org\/?page_id=10690"},"modified":"2025-03-24T15:19:30","modified_gmt":"2025-03-24T22:19:30","slug":"consolidate-debts-home-equity-loan-refinance-mortgage","status":"publish","type":"page","link":"https:\/\/nomoredebts.org\/debt-help\/debt-consolidation\/consolidate-debts-home-equity-loan-refinance-mortgage","title":{"rendered":"Home Equity to Consolidate Debts – Refinance \/ Second Mortgage"},"content":{"rendered":"

[et_pb_section fb_built=”1″ admin_label=”Banner Image with Heading and Text” module_class=”vertical-align” _builder_version=”4.16″ use_background_color_gradient=”on” background_color_gradient_type=”circular” background_color_gradient_stops=”rgba(91,37,175,0.44) 15%|rgba(91,37,175,0) 70%” background_color_gradient_overlays_image=”on” background_color_gradient_start=”rgba(91,37,175,0.44)” background_color_gradient_start_position=”15%” background_color_gradient_end=”rgba(91,37,175,0)” background_color_gradient_end_position=”70%” background_image=”https:\/\/nomoredebts.org\/wp-content\/uploads\/2020\/08\/home-equity-to-consolidate-debts_hero.jpg” min_height=”550px” bottom_divider_style=”wave2″ bottom_divider_color=”#e7dff3″ bottom_divider_height_tablet=”70px” bottom_divider_height_phone=”50px” bottom_divider_height_last_edited=”on|phone” background_last_edited=”on|phone” background_size_phone=”cover” background_position_tablet=”top_center” background_position_phone=”top_center” da_disable_devices=”off|off|off” global_colors_info=”{}” da_is_popup=”off” da_exit_intent=”off” da_has_close=”on” da_alt_close=”off” da_dark_close=”off” da_not_modal=”on” da_is_singular=”off” da_with_loader=”off” da_has_shadow=”on”][et_pb_row custom_padding_last_edited=”on|phone” admin_label=”Row” _builder_version=”4.16″ background_enable_image=”off” max_width=”100%” custom_margin=”||||false|false” custom_padding=”||90px||false|false” custom_padding_tablet=”” custom_padding_phone=”||80px||false|false” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.16″ global_colors_info=”{}”][et_pb_text admin_label=”Heading” _builder_version=”4.16″ text_font=”|600|||||||” text_font_size=”42px” text_line_height=”1em” text_orientation=”center” background_layout=”dark” module_alignment=”center” custom_margin=”||26px|||” animation_direction=”top” text_text_shadow_style=”preset2″ global_colors_info=”{}”]<\/p>\n

Using Home Equity to Consolidate Debts<\/p>\n

[\/et_pb_text][et_pb_text admin_label=”Text” _builder_version=”4.22.0″ text_font_size=”22px” text_line_height=”1em” text_orientation=”center” background_layout=”dark” module_alignment=”center” custom_margin=”||||false|false” custom_padding=”||||false|false” animation_style=”slide” animation_direction=”bottom” animation_intensity_slide=”25%” text_text_shadow_style=”preset2″ global_colors_info=”{}”]<\/p>\n

Refinancing your home can be a way to consolidate your debts.<\/p>\n

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Home Equity to Consolidate Debts
\nRefinance Your Home or Get a Second Mortgage<\/span><\/h1>\n

What does\u00a0using home equity to consolidate your debts\u00a0<\/strong>mean? It means using the equity in your home (i.e.\u00a0refinancing your home) to consolidate your debts into one payment in order to pay off your debts.<\/em><\/p>\n

“Home Equity Loan”, “Home Equity Line”, “Refinancing your mortgage or re-mortgage,” and\u00a0getting a “second mortgage”<\/a>\u00a0are all different names for the same thing and are sometimes used as a debt consolidation option. These terms refer to the bank lending you money against the portion of your home that you own. So if the bank thinks that your home is worth $300,000 and your mortgage is for $250,000, then you own $50,000 of your house. This is called your “equity.”<\/p>\n

Increasing your mortgage<\/strong> is something that the bank<\/strong> may let you do by taking out a second mortgage that uses up some of this equity to pay off your debts (check out our handy mortgage and debt consolidation calculator<\/a>). You would then have two mortgages: your first mortgage and a second mortgage which could be the\u00a0debt consolidation home\u00a0loan<\/strong>. If this is something you’re interested in doing, speak with your bank or credit union to find out how it works, to get information about the mortgage rules in Canada<\/a><\/strong>, and see if this option could work for you. Sometimes if you have bad credit<\/strong>, it might be\u00a0difficult to get a debt consolidation loan<\/a>, so using home equity could be another possibility. Check with a credit counsellor to make sure that you choose the right option.[\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ next_background_color=”#e4f8e0″ _builder_version=”4.16″ _module_preset=”default” custom_padding=”85px||100px|||” bottom_divider_style=”ramp2″ da_disable_devices=”off|off|off” global_colors_info=”{}” da_is_popup=”off” da_exit_intent=”off” da_has_close=”on” da_alt_close=”off” da_dark_close=”off” da_not_modal=”on” da_is_singular=”off” da_with_loader=”off” da_has_shadow=”on”][et_pb_row column_structure=”1_2,1_2″ _builder_version=”4.16″ _module_preset=”default” global_colors_info=”{}”][et_pb_column type=”1_2″ _builder_version=”4.16″ _module_preset=”default” global_colors_info=”{}”][et_pb_image src=”https:\/\/nomoredebts.org\/wp-content\/uploads\/2020\/09\/a-retired-couple-talking-to-their-credit-counsellor_2colm.jpg” alt=”Selling Your House To Pay Off Debt” title_text=”a-retired-couple-talking-to-their-credit-counsellor” _builder_version=”4.22.0″ _module_preset=”default” animation_style=”slide” animation_direction=”left” animation_intensity_slide=”2%” border_radii=”off|200px|20px|200px|20px” box_shadow_style=”preset1″ global_colors_info=”{}”][\/et_pb_image][\/et_pb_column][et_pb_column type=”1_2″ _builder_version=”4.16″ _module_preset=”default” global_colors_info=”{}”][et_pb_text _builder_version=”4.16″ _module_preset=”default” global_colors_info=”{}”]<\/p>\n

Selling Your House to Pay Off Debt
Talk to a Credit Counsellor About Consolidating Debts<\/span><\/h2>\n

You could also\u00a0sell your house<\/a>\u00a0to pay off debts<\/strong>, though this should be a last resort due to your situation (e.g. down-sizing in retirement). There are things to know\u00a0before<\/strong>\u00a0using your\u00a0home equity line<\/a>, so to choose the\u00a0best way<\/strong> that fits your situation, talk to a\u00a0trusted, accredited non-profit credit counsellor (especially if you’re retired or your income has changed).<\/p>\n

[\/et_pb_text][et_pb_button button_url=”\/contact-us#options” url_new_window=”on” button_text=”Talk to a Credit Counsellor” button_alignment=”center” _builder_version=”4.16″ _module_preset=”default” global_colors_info=”{}”][\/et_pb_button][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ custom_padding_last_edited=”on|phone” next_background_color=”#ffffff” _builder_version=”4.16″ _module_preset=”default” background_color=”#e4f8e0″ custom_padding=”85px||130px|||” custom_padding_tablet=”50px||100px||false|false” custom_padding_phone=”” bottom_divider_style=”curve2″ da_disable_devices=”off|off|off” global_colors_info=”{}” da_is_popup=”off” da_exit_intent=”off” da_has_close=”on” da_alt_close=”off” da_dark_close=”off” da_not_modal=”on” da_is_singular=”off” da_with_loader=”off” da_has_shadow=”on”][et_pb_row column_structure=”1_2,1_2″ module_class=”custom_row” _builder_version=”4.16″ _module_preset=”default” global_colors_info=”{}”][et_pb_column type=”1_2″ module_class=”vertical-align second-on-mobile” _builder_version=”4.16″ _module_preset=”default” global_colors_info=”{}”][et_pb_text _builder_version=”4.16″ _module_preset=”default” global_colors_info=”{}”]<\/p>\n

Interest Rates for Second Mortgages Can Be Higher Than the First – Talk to Your Bank About Using Your Home Equity<\/h2>\n

Sometimes you can get the same interest rate on your second mortgage as you got on your first mortgage, but this isn’t always possible (talk to your lender to find out more). If you do have to pay a higher interest rate on your second mortgage, you can set up the due date\/term to match the due date\/term for your first mortgage. This will allow you to combine them at the bank’s best<\/strong> interest rate when they need to be renewed.<\/p>\n

Re-mortgaging may also be an option that your lender can explain to you. It may allow you to keep a low interest rate, only have one mortgage payment and still give you funds to pay off other debts.<\/p>\n

[\/et_pb_text][\/et_pb_column][et_pb_column type=”1_2″ module_class=”first-on-mobile” _builder_version=”4.16″ _module_preset=”default” global_colors_info=”{}”][et_pb_image src=”https:\/\/nomoredebts.org\/wp-content\/uploads\/2020\/08\/high-interest-rates_2colm.jpg” alt=”High Interest Rates” title_text=”high-interest-rates” _builder_version=”4.22.0″ _module_preset=”default” animation_style=”slide” animation_direction=”right” animation_intensity_slide=”2%” border_radii=”off|200px|20px|200px|20px” box_shadow_style=”preset1″ global_colors_info=”{}”][\/et_pb_image][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ next_background_color=”#e7dff3″ _builder_version=”4.16″ _module_preset=”default” custom_padding=”90px||130px|||” bottom_divider_style=”ramp2″ da_disable_devices=”off|off|off” global_colors_info=”{}” da_is_popup=”off” da_exit_intent=”off” da_has_close=”on” da_alt_close=”off” da_dark_close=”off” da_not_modal=”on” da_is_singular=”off” da_with_loader=”off” da_has_shadow=”on”][et_pb_row column_structure=”1_2,1_2″ _builder_version=”4.16″ _module_preset=”default” global_colors_info=”{}”][et_pb_column type=”1_2″ _builder_version=”4.16″ _module_preset=”default” global_colors_info=”{}”][et_pb_image src=”https:\/\/nomoredebts.org\/wp-content\/uploads\/2020\/08\/history-of-mortgage-rates-in-canada_2colm.jpg” alt=”Mortgage Rates In Canada” title_text=”history-of-mortgage-rates-in-canada” _builder_version=”4.22.0″ _module_preset=”default” animation_style=”slide” animation_direction=”left” animation_intensity_slide=”2%” border_radii=”off|200px|20px|200px|20px” box_shadow_style=”preset1″ global_colors_info=”{}”][\/et_pb_image][\/et_pb_column][et_pb_column type=”1_2″ _builder_version=”4.16″ _module_preset=”default” global_colors_info=”{}”][et_pb_text _builder_version=”4.16″ _module_preset=”default” global_colors_info=”{}”]<\/p>\n

History of Mortgage Rates in Canada
Declining Since 1980’s<\/span><\/h2>\n

Ever since the early 1980’s, mortgage rates have been declining in Canada. They peaked at over 20% at that time but are now typically offered in the 3% – 6% range. It’s wise to remain mindful of the fact that we’re currently living with historically low interest rates. This means that we cannot count on them to stay this low forever. The average five year mortgage rate over the past 60 years has been 8.95%. So if you’re considering<\/strong> refinancing your home, make sure you can afford an “average” interest rate of 9% in the long term.<\/p>\n

[\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ custom_padding_last_edited=”on|tablet” next_background_color=”#ffffff” _builder_version=”4.16″ _module_preset=”default” background_color=”#e7dff3″ custom_padding=”90px||120px|||” custom_padding_tablet=”||100px||false|false” custom_padding_phone=”” bottom_divider_style=”curve2″ da_disable_devices=”off|off|off” global_colors_info=”{}” da_is_popup=”off” da_exit_intent=”off” da_has_close=”on” da_alt_close=”off” da_dark_close=”off” da_not_modal=”on” da_is_singular=”off” da_with_loader=”off” da_has_shadow=”on”][et_pb_row column_structure=”1_2,1_2″ module_class=”custom_row” _builder_version=”4.16″ _module_preset=”default” global_colors_info=”{}”][et_pb_column type=”1_2″ module_class=”vertical-align second-on-mobile” _builder_version=”4.16″ _module_preset=”default” global_colors_info=”{}”][et_pb_text _builder_version=”4.23.4″ _module_preset=”default” global_colors_info=”{}”]<\/p>\n

Finance Companies and Sub Prime Lenders or Loan Companies Offering Mortgages
\nHigher Interest Rates Than Banks<\/span><\/h2>\n

Finance companies and sub-prime lenders also offer mortgages. Their interest rates will almost always be higher than the bank’s and can often range between 14% – 30%. These rates are a lot higher because these companies tend to lend money to people in financial situations that are riskier than banks usually want to take on.<\/p>\n

High interest loans<\/a>\u00a0like these can be used as a tool to get you from point A to B, but you should do your best to find a better arrangement as fast as possible. It’s very hard to get ahead paying really high interest rates.[\/et_pb_text][\/et_pb_column][et_pb_column type=”1_2″ module_class=”first-on-mobile” _builder_version=”4.16″ _module_preset=”default” global_colors_info=”{}”][et_pb_image src=”https:\/\/nomoredebts.org\/wp-content\/uploads\/2020\/08\/high-interest-than-banks_2colm.jpg” alt=”Higher Interest Rates Than Banks” title_text=”high-interest-than-banks” _builder_version=”4.22.0″ _module_preset=”default” animation_style=”slide” animation_direction=”right” animation_intensity_slide=”2%” border_radii=”off|200px|20px|200px|20px” box_shadow_style=”preset1″ global_colors_info=”{}”][\/et_pb_image][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ custom_padding_last_edited=”on|tablet” next_background_color=”#5b25af” _builder_version=”4.16″ _module_preset=”default” custom_padding=”70px||110px|||” custom_padding_tablet=”||100px||false|false” custom_padding_phone=”” bottom_divider_style=”slant2″ da_disable_devices=”off|off|off” global_colors_info=”{}” da_is_popup=”off” da_exit_intent=”off” da_has_close=”on” da_alt_close=”off” da_dark_close=”off” da_not_modal=”on” da_is_singular=”off” da_with_loader=”off” da_has_shadow=”on”][et_pb_row _builder_version=”4.16″ _module_preset=”default” custom_padding=”||3px|||” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.16″ _module_preset=”default” global_colors_info=”{}”][et_pb_text _builder_version=”4.16″ _module_preset=”default” global_colors_info=”{}”]<\/p>\n

Using a Second Mortgage to Consolidate Debt
Advantages and Disadvantages Layed Out<\/span><\/h2>\n

[\/et_pb_text][\/et_pb_column][\/et_pb_row][et_pb_row column_structure=”1_2,1_2″ _builder_version=”4.16″ _module_preset=”default” custom_padding=”8px|||||” global_colors_info=”{}”][et_pb_column type=”1_2″ _builder_version=”4.16″ _module_preset=”default” global_colors_info=”{}”][et_pb_text _builder_version=”4.16″ _module_preset=”default” global_colors_info=”{}”]<\/p>\n

Advantages<\/h3>\n
    \n
  1. The interest rates are typically low<\/li>\n
  2. Flexible payment arrangements. You can usually extend your amortization (the length of time required to pay back the loan) to create an ideal monthly payment<\/li>\n
  3. If your mortgage is setup properly, taking out another mortgage tier can be relatively quick and easy<\/li>\n<\/ol>\n

    [\/et_pb_text][\/et_pb_column][et_pb_column type=”1_2″ _builder_version=”4.16″ _module_preset=”default” global_colors_info=”{}”][et_pb_text _builder_version=”4.16″ _module_preset=”default” global_colors_info=”{}”]<\/p>\n

    Disadvantages<\/h3>\n
      \n
    1. You must have enough equity in your home as well as income to make both mortgage payments<\/li>\n
    2. You may be charged a number of fees for the costs involved in setting up a second mortgage<\/li>\n
    3. Banks often don’t like to do small second mortgages. $10,000 may be the minimum that they will consider<\/li>\n<\/ol>\n

      [\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ custom_padding_last_edited=”on|phone” admin_label=”CTA – 2 Column w\/form on Purple” _builder_version=”4.16″ background_color=”#5b25af” background_enable_image=”off” z_index=”0″ max_width=”100%” custom_margin_tablet=”||0px||false|false” custom_margin_phone=”||0px||false|false” custom_margin_last_edited=”on|phone” custom_padding=”70px||120px||false|false” custom_padding_tablet=”0px||40px||false|false” custom_padding_phone=”0px||30px||false|false” top_divider_height=”180px” top_divider_flip=”horizontal” top_divider_height_tablet=”100px” top_divider_height_phone=”” top_divider_height_last_edited=”on|phone” bottom_divider_style=”ramp2″ bottom_divider_color=”#e7dff3″ bottom_divider_height=”150px” bottom_divider_style_last_edited=”off|tablet” bottom_divider_height_tablet=”80px” bottom_divider_height_phone=”70px” bottom_divider_height_last_edited=”on|phone” scroll_blur=”0|40|60|100|100px|0px|0px” da_disable_devices=”off|off|off” global_colors_info=”{}” da_is_popup=”off” da_exit_intent=”off” da_has_close=”on” da_alt_close=”off” da_dark_close=”off” da_not_modal=”on” da_is_singular=”off” da_with_loader=”off” da_has_shadow=”on”][et_pb_row column_structure=”3_5,2_5″ use_custom_gutter=”on” gutter_width=”1″ make_equal=”on” custom_padding_last_edited=”on|phone” admin_label=”Service Section Title” _builder_version=”4.27.2″ width_tablet=”” width_phone=”100%” width_last_edited=”on|phone” module_alignment=”center” custom_margin=”|auto||auto|false|false” custom_padding=”30px||||false|false” custom_padding_tablet=”200px||100px||false|false” custom_padding_phone=”200px||||false|false” animation_direction=”top” locked=”off” global_colors_info=”{}”][et_pb_column type=”3_5″ _builder_version=”4.16″ custom_padding=”|50px||50px|false|false” custom_css_main_element=”margin: auto;” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_text admin_label=”Title” _builder_version=”4.27.2″ text_font=”|700|||||||” text_text_color=”#ffffff” text_font_size=”30px” text_line_height=”1.1em” header_font=”||||||||” header_text_color=”#ffffff” header_2_font=”Montserrat|700||on|||||” header_2_font_size=”42px” header_2_line_height=”1.3em” background_size=”initial” background_position=”top_left” background_repeat=”repeat” text_orientation=”center” background_layout=”dark” max_width=”700px” module_alignment=”center” custom_margin=”||||false|false” custom_padding=”10px||||false|false” animation_direction=”bottom” inline_fonts=”Work Sans” global_colors_info=”{}”]<\/p>\n

      Speak with us for more information about how to use a home equity line to consolidate debts<\/p>\n

      [\/et_pb_text][et_pb_text admin_label=”Subtitle” _builder_version=”4.27.2″ text_font=”||||||||” text_text_color=”#ffffff” text_line_height=”1.8em” header_font=”||||||||” background_size=”initial” background_position=”top_left” background_repeat=”repeat” text_orientation=”center” max_width=”430px” max_width_tablet=”” max_width_phone=”” max_width_last_edited=”on|phone” module_alignment=”center” custom_margin=”|||” custom_padding=”25px||25px||false|false” animation_direction=”bottom” global_colors_info=”{}”]<\/p>\n

      We can give you information on how to use\u00a0home equity to consolidate debts<\/strong> or pay off debts. Our appointments are free, confidential and informative. You may have other options that are better for your situation, so before you increase your mortgage, take out a second one (at a higher interest rate) or apply for a home equity loan<\/a>, give us a call.<\/p>\n

      [\/et_pb_text][et_pb_button button_url=”\/contact-us#options” button_text=”Talk with us” button_alignment=”center” _builder_version=”4.27.2″ _module_preset=”default” custom_button=”on” button_bg_color=”#2ad13d” button_use_icon=”off” global_colors_info=”{}” button_border_radius__hover_enabled=”on|hover” button_border_radius__hover=”8px” button_bg_color__hover_enabled=”on|hover” button_bg_color__hover=”RGBA(255,255,255,0)” button_bg_enable_color__hover=”on” button_text_color__hover_enabled=”on|hover” button_text_color__hover=”#2AD13D”][\/et_pb_button][\/et_pb_column][et_pb_column type=”2_5″ _builder_version=”4.27.2″ background_color=”#4e128c” animation_direction=”right” custom_css_main_element=”margin: auto;” border_radii=”on|8px|8px|8px|8px” global_colors_info=”{}” custom_padding__hover=”|||” custom_css_main_element_last_edited=”on|phone” custom_css_main_element_tablet=”margin-top: 80px;” custom_css_main_element_phone=”margin-top: 80px;||margin-left: 20px;||max-width: 360px;”][et_pb_code _builder_version=”4.27.2″ _module_preset=”default” module_alignment=”center” global_module=”50730″ saved_tabs=”all” global_colors_info=”{}”] <\/p>\n