Property Investment – What You Should Consider
Take the emotion out When buying an investment property you should treat it as a business decision and not be emotional. A common mistake is that people buy a house…
Before you roll your debts into your home loan, run the numbers. The monthly saving can hide a much bigger long-term cost.
Debt consolidation means combining your credit cards, car loan, personal loans, or other debts into your home loan. It usually lowers your monthly repayment, because home loan interest rates are generally lower than credit card and personal loan rates. But it can also cost you more overall, because that debt is now being repaid over your home loan's term, often 25 to 30 years, instead of the 3 to 7 years left on the original debts.
Lower monthly repayment and lower total cost are not the same thing. This is the calculation most people miss, and it is the one we think matters most before you decide.
Say you have $30,000 spread across a couple of credit cards and a personal loan, with combined repayments of around $800 a month. Consolidate that into your home loan and your repayment might drop to around $550 a month. That feels like a win.
Here is what that comparison usually leaves out:
| Before | After | |
|---|---|---|
| Monthly repayment (combined debts) | $800 | $550 |
| Approximate remaining term | 5 to 7 years | 25 to 30 years |
| Total interest paid over the life of the debt | Lower | Often significantly higher |
The repayment is lower because the debt has been stretched across a much longer term. The same $30,000, repaid over 25 to 30 years instead of 5, can end up costing thousands more in total interest, even at a lower rate. This is general information only. Your actual outcome depends on your loan balance, interest rate, and the term you choose.
Not "will my monthly repayment go down?" but "will I pay more in total over the life of this debt?" Those can have very different answers, and the second one is the one that actually matters to your wealth.
You are disciplined about not running the credit cards back up once they are cleared.
The extra repayments are directed at paying down the consolidated amount faster than the minimum, rather than just enjoying the lower repayment.
You compare the total interest cost, not just the monthly repayment, before deciding.
You are using it to escape genuinely high-interest debt, such as credit cards, rather than debt that was already reasonably priced.
This is exactly the kind of decision that should never be made on a feeling. We built a calculator inside the Investors Choice Mortgages Hub specifically so you can see the real cost of consolidating your debt, not just the monthly repayment, before you decide anything.
See your actual repayment term and total interest cost side by side, free, and with no obligation.
Visit hub.investorschoice.com.au to try the calculator and explore our other free tools.
It can lower your monthly repayment, but it does not automatically save you money overall. Spreading short-term debt across a 25 to 30 year home loan term can mean paying more in total interest, even at a lower rate. Always compare the total cost, not just the monthly figure.
Most consumer debts can be consolidated, including credit cards, personal loans, car loans, and store finance. What is appropriate depends on your equity position, your lender, and your overall financial picture.
Matt Kyroussis is dual-qualified, 11 years in financial planning and 8 years in broking, so the conversation covers your full financial picture, not just whether you can lower a monthly repayment.
We show you the total cost comparison, not just the headline monthly saving.
Every fee and commission is disclosed upfront.
You will never talk to a bot about a decision this important.
Book Matt's complimentary Quick Start call to talk through whether consolidation is appropriate for your situation, or jump into the Hub calculator first to see your own numbers.
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