Home equity at mortgage renewal can help pay high-interest debt.

The article describes how homeowners in B.C. can use built-up home equity when their mortgage renews to refinance and roll unsecured, high-interest debt into the mortgage, which the author says can lower interest costs and improve monthly cash flow.

Many homeowners in British Columbia treat mortgage renewal as a moment to reassess finances and set new goals. The article reports that one strategy a mortgage broker of 30 years often recommends is using built-up home equity at renewal to refinance and pay off higher-interest unsecured debt. This approach involves incorporating debts such as credit cards and personal loans into a new mortgage balance. The piece notes the strategy can be considered at renewal or, in some cases, mid-term despite a payout penalty. Key points: - The article lists common unsecured debts: credit cards, personal loans, lines of credit, vehicle loans and store financing accounts. - It reports that unsecured debt typically carries significantly higher interest rates than mortgage financing, so moving that debt into a mortgage can reduce overall interest paid over time. - The article says benefits often include lower monthly payments, simplified finances through single mortgage payments, and improved cash flow. - It notes some homeowners refinance mid-term even with a payout penalty when the long-term interest savings outweigh the penalty cost. - The author emphasizes this strategy works best as part of a broader plan rather than a short-term fix. Summary: The article presents refinancing at mortgage renewal as an opportunity to convert high-interest unsecured debt into lower-cost mortgage financing, potentially easing monthly obligations and simplifying payments. Undetermined at this time.