What happens if you fold debt into the mortgage?
Moving debt into a mortgage usually lowers the monthly payment and stretches the term. Both things are true at once, and the second one is the part people miss. Run your numbers and look at both.
Everything you pay now against everything you would pay after:
$282 lower per month
The month gets easier and the total gets bigger. On these numbers you would repay $272,785 more overall. That trade can still be the right one. It should be a decision, not a surprise.
Month to month
- Now: mortgage principal and interest
- $1,847 / mo
- Now: with taxes and insurance
- $2,397 / mo
- Now: plus your other debt payments
- $3,297 / mo
- After: mortgage principal and interest
- $2,465 / mo
- After: with taxes and insurance
- $3,015 / mo
Over the full term
- Now: total you would repay
- $620,639
- Now: of which interest
- $230,639
- After: total you would repay
- $893,424
- After: of which interest
- $497,424
- New loan-to-value
- 78%
- Months to work off the closing costs
- 22
What this assumed
- Taxes and homeowners insurance are the same on both sides, so the gap is never an artifact of one side including them and the other not.
- Your other debt is assumed to be paid at its current payment and rate until it clears. If the payment does not cover the interest, the total says so instead of inventing a payoff date.
- The lifetime total after includes closing costs and any mortgage insurance you entered, across the full term of 30 years.
- The two lifetime totals cover different lengths of time: about 25 years now, and 30 years after. That gap is not a rounding artifact. Stretching the balance back out over a longer term is most of what makes the monthly figure fall, and paying for more years is most of what makes the lifetime figure rise. Both numbers are real, and they are the same trade seen from two ends.
- Not included: whether you would take on new debt afterwards, which is what most often undoes a consolidation.
The loan-to-value figure above is worth asking about. How much you can borrow against the home, and whether mortgage insurance comes into it, depends on the loan and the lender rather than on any line a calculator can draw.
A lower monthly payment is not the same as paying less. Rolling short-term debt into a long mortgage can cost far more in total interest, and it puts your home behind that debt. Sometimes it is the right move and sometimes it is not, which is exactly why both numbers are on this page. This is an educational estimate, not a rate quote or a commitment to lend.