Refinance to Pay Off Debt

How it works

A cash-out refinance replaces your current mortgage with a new, larger loan. You borrow more than you owe and receive the difference in cash. Use that cash to pay off credit cards, personal loans, medical bills, or other high-interest debt. You then have one mortgage payment instead of multiple debt payments.

Mortgage rates are often lower than credit card or personal loan rates, so consolidating can reduce your total interest and simplify your finances. The trade-off: you're securing that debt with your home. If you fall behind, you risk foreclosure.

When it makes sense

• You have significant high-interest debt (credit cards, personal loans)
• You have enough equity (typically 20%+ after the new loan)
• Your new mortgage rate is lower than your current debt rates
• You're committed to not racking up new debt after paying off the old

Next steps

Compare refinance options and see if a cash-out refinance fits your situation. Apply here and get matched with licensed brokers who can walk you through the numbers.