Debt Consolidation Calculator: What You’d Save Monthly
What your credit cards actually cost you each month vs. one payment secured against your home — the math banks don’t show homeowners with bruised credit.
Debt consolidation savings calculator
Enter what you owe and what you pay each month — see your payment next to one consolidated payment at 5.99%.
5.99% reflects typical B-lender home-equity pricing for qualified files; private files run higher. Estimates only — for a real number on your equity: 1-866-329-8801.
The minimum-payment math that keeps you stuck
Carrying $45,000 across cards and personal loans at an average 21% costs about $788 a month in interest alone. Minimum payments — typically interest plus 1% of the balance — run near $1,240 a month, yet shrink the debt by only about $450. At that pace the balance barely moves for years.
The same $45,000 consolidated into a home equity loan at an illustrative 7.99% over 10 years is about $546 a month — fully amortized, so every payment cuts principal, with a fixed end date. The roughly $690/month difference is an estimate, not a promise — your rate, fees, and term shift it — but the structure change is the point: from revolving minimums that tread water to a schedule that finishes. Run your real balances above.
Which debts belong in a consolidation — and which don’t
Good candidates: credit cards, unsecured lines and personal loans at 12–29%, payday loans, collections balances, and CRA arrears (which compound daily and can trigger liens — clearing them from proceeds is often priority one). Poor candidates: a car loan at 6%, interest-free promotional balances, or a student loan with tax-deductible interest — rolling low-rate debt into a longer amortization can raise its lifetime cost.
The calculator lets you consolidate selectively: enter only the high-rate balances and leave cheap debt where it sits.
What consolidation does to your credit score
When the loan pays out your cards, your utilization — the share of available credit you’re using, and one of the biggest inputs to your score — drops sharply, often from 90%+ to near zero. Most homeowners see measurable improvement within 60–90 days, provided the new payment is made on time and the cleared cards aren’t re-loaded. No specific point increase can be promised; the mechanics, though, reliably point the file in the right direction. To see your utilization numbers before and after, use the Credit Utilization Calculator.
The honest trade-off: unsecured debt becomes secured
Consolidating with home equity converts unsecured debt — where the worst case is collections and a damaged file — into debt secured against your home, where sustained default puts the property at risk. That trade is usually worth making because the payment drops so much, but it deserves saying plainly: the lower rate is not free; it’s priced against your house. If the consolidated payment would still strain your budget, consolidation isn’t the fix — see the next section.
Debt consolidation vs. consumer proposal
A consumer proposal legally reduces what you owe; consolidation repays it in full at a lower rate. The proposal’s price: your credit file carries an R7 for years, most lending closes off, and homeowners can face pressure on the equity anyway. Consolidation costs more in dollars repaid but keeps your credit rebuilding from day one and your borrowing options open.
The rough dividing line: with meaningful home equity and enough income to carry about $550 on $45,000, consolidation usually leads to a stronger position in 24 months. Without the equity or the income to sustain any realistic payment, a proposal may genuinely be the better tool — and we’ll say so when it is.
Frequently Asked Questions
How does debt consolidation work in Canada?
You replace several high-interest debts — credit cards at 20%+, unsecured loans, tax arrears — with one lower-rate loan and one payment. For homeowners the cheapest route is secured: a refinance, second mortgage, or home equity loan at a fraction of card rates.
Can I consolidate debt into my mortgage?
Yes — either by refinancing your first mortgage to a bigger balance, or by adding a second mortgage and leaving your first untouched. The second is usually the answer when your existing rate is low or your credit won’t pass bank refinancing rules.
Can I get a debt consolidation loan with bad credit?
As a homeowner, yes — equity qualifies you when your score won’t. Unsecured consolidation loans need good credit, but B and private lenders approve homeowner consolidations with scores in the 500s because the property secures the loan.
Does debt consolidation hurt your credit score?
Usually the opposite. Paying cards to zero drops your utilization — one of the biggest score factors — and replaces multiple minimum payments with one on-time payment. Many homeowners see their scores improve in the months after consolidating, though timing depends on the rest of the file.
Debt consolidation vs consumer proposal — what’s the difference?
A consolidation loan repays creditors in full and protects your credit. A consumer proposal settles debts for less but is a formal insolvency: it drops your rating to R7 and sits on your bureau for years, and it can complicate future mortgage approvals. Which route is right depends on your equity, total debt, affordability and long-term cash flow — and anyone seriously weighing insolvency should also speak with a licensed insolvency trustee. For homeowners with enough equity, consolidation is usually worth pricing first because it repays in full and protects your credit.
How much can consolidating debt actually save per month?
Moving $60,000 of 21% card debt to a 7.5% secured loan cuts interest from about $1,050 to $375 a month — before even touching the principal. Use the calculator above with your own balance and rate to see the spread.
Want your real numbers, not estimates?
One call gets you an actual range for your property and situation — before any credit check.
📞 1-866-329-8801
Online Application →
Parm Mehmi, Principal Broker · FSRA #13163 | FCAA #511322 · Licensed in Ontario, Alberta & Saskatchewan
Planning estimates only — not financial, lending or legal advice. Lender terms vary; appraisals and payout statements govern actual figures.
See What This Looks Like in Your City
These numbers are estimates. What you can actually borrow depends on an appraisal of your property and the lenders active in your market. Pick your city for local figures, or call and we will run it with you.
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How much can consolidating debt into your mortgage save each month?
The formula
Monthly saving = current total monthly payments − payment on the same debt secured against your home
Worked example
Carrying $60,000 of credit card and loan debt costing $1,800 a month, secured at 9.99% over a 25-year amortization, the payment falls to roughly $545 a month — about $1,255 a month less.
Worth knowing: The monthly payment falls because the amortization is far longer. Total interest over the full term can still be higher unless you pay it down faster.
Figures verified August 2026. Estimates only — your actual terms depend on your file.