Question 1

How much can I consolidate?

Accepted Answer

Up to 80% of your home's appraised value, less your existing first mortgage and reasonable closing costs. For most owner-occupied properties that's enough to clear all unsecured debt and still leave equity.

Question 2

Will consolidating hurt my credit score?

Accepted Answer

Short-term, your score may dip 10–30 points from the new mortgage placement. Within 90 days the cleared revolving balances typically push your score higher than before.

Question 3

What if I have collections or judgements?

Accepted Answer

Most need to be paid out at closing. Alternative lenders can include collection payouts in the new mortgage so you don't need cash on hand.

Question 4

Can I consolidate debt after a consumer proposal?

Accepted Answer

Yes — most alternative lenders will refinance 12–24 months after a consumer proposal is discharged, and some private lenders will lend during an active proposal on an equity basis.

Question 5

How much can debt consolidation actually save me?

Accepted Answer

Rolling $40,000 of credit-card debt (avg $1,000/month minimum payments at 22% interest) into a 5-year fixed mortgage typically drops the payment to roughly $250/month — freeing $750/month and cutting total interest cost dramatically.

Question 6

Should I consolidate all my debt or just some?

Accepted Answer

The rule of thumb: consolidate anything above ~10% interest. Leave low-interest student loans and 0% promotional balances alone unless including them is the only way to hit an approvable loan-to-value.

Question 7

Can I consolidate CRA debt with a mortgage refinance?

Accepted Answer

Yes. CRA arrears must be paid out at closing, and this is a common motivating factor for a refinance. CRA holds super-priority, so lenders always insist on clearing it.

Question 8

How long does a debt consolidation refinance take?

Accepted Answer

Typically 2–3 weeks for a prime-lender refinance, 7–14 days at an alternative lender, or 5–10 days through a private lender when timing is urgent.

Question 9

Will consolidating close my credit cards?

Accepted Answer

Only if you choose to. Best practice: consolidate the balances, keep the cards open with small autopay charges, and pay them off monthly. This protects your credit utilization ratio and available-credit score component.

Question 10

How is debt consolidation different from a consumer proposal?

Accepted Answer

Debt consolidation repays creditors in full at a lower rate — no credit damage beyond the credit pull. A consumer proposal repays creditors partially and reports on your bureau as R7 for 3 years post-completion.

Question 11

Can I consolidate if my mortgage is with a Big-Five bank at a great rate?

Accepted Answer

Often better to add a second mortgage than break a sub-3% first. We model both scenarios explicitly.

Question 12

How much does consolidation actually improve my credit score?

Accepted Answer

Typically 60–100 points within 90 days once revolving utilization drops from 60%+ down under 30%. Utilization is the fastest-moving component of your FICO score.

	Consolidation Refinance	Consumer Proposal	Debt-Management Plan
Repay creditors in full?	Yes	No (typically 30–50%)	Yes
Credit bureau impact	Minor, recovers fast	R7 for 3 years post-completion	R7 on affected accounts
Requires equity?	Yes	No	No
Monthly cash-flow relief	High ($500–$2,000)	High	Moderate
Ongoing rate	Mortgage rate	0% during plan	Reduced by ~40%

Debt Consolidation

Get Pre-Qualified

Who a debt consolidation is — and isn't — for

Myths vs. reality

Consolidation Refinance vs. Consumer Proposal vs. Debt-Management Plan

What working together looks like

Debt inventory

Refinance modelling

Approval & payout instructions

Credit rebuild plan

Common questions

Debt Consolidation across Ontario

From the Learning Centre

Mortgage Debt Consolidation

Jay Klair

Other services

Home Purchase Mortgage

Mortgage Refinance

Reverse Mortgage

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