Before you pursue this option, a financial situation analysis is strongly recommended.
That way, if you come to the conclusion that your current payments are too high, your income is irregular, or you are paying far too much interest on your other debts, debt consolidation might be a feasible solution for you.
Obviously, there can be many advantages to this option, including a lower cost of monthly payments. Because the interest rate on a mortgage is typically lower than credit card, personal loan and personal line of credit interest rates, this can mean significant savings for you each month. Also, by combining your debts, you’ll only have one monthly payment to think about—making it easier to keep track of your finances and harder to forget a payment.
Feel free to contact a The Mortgage Processing Centre.ca mortgage broker to learn more about debt consolidation and discuss whether this is the best option for you.
As a result, it is essential for you to know your own needs and to set a budget that won’t compromise your lifestyle or your financial health. This thought process is what will help you determine your borrowing capacity and evaluate the feasibility of your plan.
Before you make any choices, your mortgage broker can make sure you are familiar with some of the key concepts when it comes to mortgages. Your broker can help give you a clear idea of what you need and explain your options. Our advisors at The Mortgage Processing Centre.ca are fully qualified and have extensive industry experience. They are here to guide you throughout the whole financing process and help you find the perfect mortgage for you.
1. Example of a debt situation
The current mortgage is amortized over: 25 years
The term is: 5 years
Renewable in: 18 months
| Debt | Balance | Interest | Monthly | Years | Total interest |
|---|---|---|---|---|---|
| Mortgage | 185 000,00$ | 4,49 % | 1 176,33 $ | 21,5 | 103 763,65 $ |
| Visa | 8 500,00 $ | 19,99 % | 170 $ | 8,45 | 9168,54 $ |
| Master Card | 3 800,00 $ | 14 % | 90,00 $ | 4,82 | 1 444,40 $ |
| Line of credit | 14 000,00 $ | 7 % | 250,00 $ | 5,65 | 2 988,77 |
| Notary + penalty | $3,300.00 | ||||
| Total | $214,600.00 | $1,686.33 | $177,365.37 |
2. Debt situation after intervention by The Mortgage Processing Centre.ca
New amortization: 20 years
New interest rate: 3.39%*
* Rate in effect when this debt consolidation example was created.
| New total monthly payment | $1,229.90* |
| New total interest | $81,199.43 |
3. Saving with the consolidation
| Monthly savings | 576.19 $ |
| Interest savings | $125,532.62 |
| Payment savings | $21,739.40 |
| Total potential savings | $146,706.56* |
*This figure represents the 18 remaining monthly payments of $1,176.33 that no longer need to be paid.