Debt consolidation is the process of combining two or more debts into one. It should result in a single debt payment and lower total interest costs.
Below is an example of how consolidating your debt into one monthly mortgage payment can save you thousands every year.
| Credit Card Debt + Mortgage | Consolidation | |
|---|---|---|
| Credit Card Debt | $47,000 | 0 |
| Average Interest Rate | 22% | 0 |
| Credit Monthly Payment (interest only) | $861.66 | 0 |
| Mortgage | $400,000 | $447,000 |
| Interest Rate | 2.45 % | 2.45% |
| Monthly Mortgage Payment | $1,567.53 | 1757.72 |
| Total Monthly Payment | $2,429.19 | 1757.72 |
| Monthly Savings | $671.47 |
Aside from the monthly savings, you are also paying down the principal amount versus only interest month to month. You can use the extra money for a variety of things or put it right back into your mortgage to pay it down faster!
You can request a Free Home Valuation below to see what equity you have available to use in your home.