DEBT CONSOLIDATION

Debt consolidation is a smart financial move where you combine multiple high-interest debts—like credit cards, personal loans, and store cards—into a single, larger loan. For most Australian homeowners, the most effective way to do this is by "topping up" or refinancing your existing home loan.

Instead of juggling five different repayments to five different lenders, you use the equity in your home to pay off those smaller debts in full. This leaves you with just one monthly repayment at a much lower interest rate, giving you back a sense of control over your household budget.

The biggest reason our clients choose to consolidate is for cash flow relief. When you roll high-interest debt (often 15%–20% on credit cards) into a home loan (typically much lower), your required monthly payout can drop significantly. This extra "breathing room" helps young families cover daily essentials without the constant fear of a missed payment.

Beyond the numbers, it’s about your peace of mind. Reducing five different due dates down to one makes it nearly impossible to "forget" a bill, which protects your credit score. It transforms a chaotic financial situation into a clear, structured path toward being debt-free.

You might be surprised by just how many different types of "expensive" debt can be rolled into your mortgage. If it has a high interest rate and a monthly bill, it’s likely a candidate for consolidation.

Common debts we help Australians consolidate include:

Many Australians don't realize that you can also consolidate debt owed to the Australian Taxation Office (ATO) into your home loan. If you're a small business owner or have an unexpected tax bill, the ATO's general interest charge (GIC) can be quite high and compounds daily, making it very hard to pay off.

The basic rule for consolidating tax debt is that you must have enough usable equity in your property (usually meaning your total loan stays under 80% of your home's value). Clearing an ATO debt this way stops the aggressive interest charges and protects you from more serious ATO collection actions, like garnishee notices.

When weighing up debt consolidation, it’s important to look at the short-term relief versus the long-term cost. While rolling a 5-year car loan into a 30-year mortgage reduces your weekly bills, it could technically cost you more in interest over those 30 years if you only pay the minimum.

The real "win" happens when you use the money you’ve saved on interest to pay off your home loan faster. At FUNDING NEST, we help you crunch the numbers to ensure the setup fees and any refinancing costs are far outweighed by the interest you save. We focus on a solution that provides immediate relief today while keeping your long-term wealth on track.