8Twelve Mortgage US
Consolidate balances

Cash-out to consolidate balances
One payment instead of many.

Cash-out to consolidate balances uses your home equity to pay off credit card and loan balances, leaving one secured payment in their place. You can do it with a cash-out refinance, which replaces your mortgage, or a home equity loan, which sits behind it. Which one costs less depends mostly on the rate you already have.

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3-minute form. A soft-credit rate estimate.

Last updated: October 2026

1
Payment in place of many
Direct
Payoffs to creditors at closing
40+
Lender network

We only recommend this when the numbers are genuinely better, and we show you the alternative when they are not. The conversation usually starts with three figures: what you owe on the cards and loans, what they cost you each month, and the rate on your current mortgage. From there, it is usually clear within a few minutes whether a refinance, a home equity loan or neither is the right move.

Who it's for

A fit if you're…

  • Carrying credit card or personal loan balances at high rates
  • Juggling several due dates and minimum payments
  • Holding equity from appreciation or years of payments
  • Stretched on monthly cash flow but otherwise paying on time
  • Wanting a plan to stay out of revolving debt once it is cleared

Creditors paid directly

Payoffs can go straight from closing to each creditor, so nothing sits in your account waiting.

Keep a low first mortgage

A home equity loan clears the balances without repricing the mortgage you already have.

Fixed payment options

A fixed-rate refinance or home equity loan stops the payoff from drifting with the market.

Pick which debts go

Clear the expensive balances and leave low-rate loans where they are.

Total cost, not just payment

A lower monthly payment over a longer term can cost more overall. We show both.

A plan for the cards

The strategy only works if the balances stay at zero. We talk through how.

Interactive scenario

Add your debts, see before and after

Card and loan rates start at typical U.S. averages by debt type - edit any of them to match your statements. Enter your mortgage rates to see the comparison. Set a balance to $0 to leave that balance out of the refinance.

$
%
Est. minimum
$973
$
%
$
$
%
$
$
%
%
$

Defaults to 2% of the new loan until you edit it.

Before refinance
—/mo
Mortgage P&I—
Other debt payments$1,393/mo
Other debt balance$50,000
Blended rate on all debt—
After refinance
New payment
—/mo
APR
—
New loan amount$335,000
Note rate / term— / 30 years
Points + lender fees$6,700
Monthly increase—

Based on the points and fees you entered. Excludes third-party closing costs that are not finance charges.

Start Cash-Out Refinance

Illustrative estimate only. Principal and interest plus a typical revolving minimum (about 1% of the balance plus monthly interest) on the balances rolled in. Stretching short-term debt over a longer mortgage term can increase total interest paid. Your actual rate, payment, and APR depend on credit, equity, occupancy, and program.

How cash-out to consolidate balances works

You borrow against your home equity, either by refinancing your mortgage into a larger loan or by adding a home equity loan behind it. At closing, the title company sends payoffs to the creditors you choose. What you are left with is your mortgage payment, or your mortgage plus one home equity payment, in place of every card and loan you cleared.

Illustrative example only

Round numbers, chosen to show the math rather than to reflect any particular lender or file. Your figures, program and pricing will differ.

Illustrative monthly payments before and after paying off balances
ItemBeforeAfter
Credit cards ($32,000)$1,050 / moPaid off
Personal loan ($18,000)$420 / moPaid off
Added mortgage-secured paymentNone$350 / mo (example)
Monthly total for these debts$1,470$350

The added payment depends on the rate and term you get. A longer term lowers it but adds interest over time, so paying extra toward principal is what keeps the saving real.

For illustration only. Not a commitment to lend, a rate lock or an offer of credit. Terms vary by lender, by property and by file.

See My Debt Payoff Options

Home equity loan to pay off balances

If the rate on your first mortgage is lower than anything you would get today, do not refinance it to pay off cards. A home equity loan sits behind that mortgage as a fixed-rate second lien, pays the balances off in one lump sum, and leaves your low rate untouched. The payment is fixed for the term, which suits debt payoff well: you know the date it ends. Select programs consider lower credit scores, often with less leverage, and some smaller loans can close without a full appraisal. If you would rather keep a line open, a HELOC works too, but its variable rate and the temptation to redraw make it a weaker tool for this job.

See what you qualify for

When a cash-out refinance is the better route

When your current mortgage rate is similar to or above today's market, a cash-out refinance can fold the mortgage and the debts into one loan and one payment, with no second lien to manage. FHA cash-out can help when credit is the obstacle. The cash-out refinance calculator shows how much equity is available and what the new loan would cost at your own rate.

See My Debt Payoff Options

When it's the wrong move

Three situations make us advise against it. If the spending that built the balances has not changed, clearing the cards just makes room to fill them again, and now the old debt is secured by your home. If you plan to sell within a year or two, closing costs may outweigh the savings. And if the balances are small, a personal loan or a structured payoff plan may be cheaper than any mortgage product.

  • Spending pattern unchanged: fix the cause before moving the debt
  • Moving soon: closing costs may never pay back
  • Small balances: a personal loan may cost less overall
  • Thin equity: leaving no cushion is a risk if values soften
Talk to a loan specialist

Keeping the cards at zero

This is the part that decides whether the payoff works. We usually suggest keeping one low-limit card for emergencies, freezing or closing the rest if your credit history allows, and sending the monthly difference to principal or savings rather than letting it disappear into spending. For more on the mechanics of each product, see the mortgage guides.

See My Debt Payoff Options

Things to weigh

  • Unsecured debt becomes secured by your home. Missing payments now puts the home at risk.
  • Spreading short-term debt over a long term can increase total interest unless you pay extra toward principal.
  • A cash-out refinance reprices your whole mortgage. If your current rate is low, a home equity loan usually costs less.
  • Closing costs reduce the saving. Look at the break-even, not just the new payment.
  • Terms are available across our lender network and vary by credit, equity and lender. Nothing here is an offer to lend.
FAQ

Questions buyers actually ask

Can I use a home equity loan to pay off balances?+

Yes. A home equity loan pays one lump sum at a fixed rate, which can clear credit cards and personal loans while your first mortgage stays in place. It is usually the better fit than a cash-out refinance when your current mortgage rate is lower than what a new first mortgage would cost.

How does cash-out to consolidate balances save money?+

Credit cards and many personal loans charge far more than mortgage-secured debt. Moving those balances into a mortgage or home equity loan can cut the interest you pay each month. The saving only holds if the paid-off cards stay paid off and the longer term does not erase it, so we show total cost, not just the payment.

Paying off debt with a mortgage refinance or a home equity loan: which is better?+

Compare the rate on your current first mortgage with what a new one would cost. If yours is lower, a home equity loan or HELOC keeps it and adds only the new money. If yours is similar or higher, a cash-out refinance can fold everything into one payment. We run both before recommending either.

What is the difference between this and a personal loan?+

A personal loan is unsecured, usually over a shorter term, so the payment is higher but the debt is gone sooner. A mortgage-secured payoff is secured by your home and spread over a longer term, so the payment is lower but total interest can be higher unless you pay extra.

Will moving debt into my mortgage hurt my credit?+

There is usually a small, short-term dip from the credit inquiry and the new account. Over time, paying off revolving balances lowers your utilization, which is one of the larger factors in most credit scores. Running the cards back up reverses that.

Do I have to pay off every debt?+

No. You choose which balances are paid at closing. Many borrowers leave a low-rate auto or student loan alone and clear only the high-rate cards and personal loans.

Can I consolidate debt with bad credit?+

Often, yes, because equity offsets some of the credit risk. FHA cash-out and select home equity programs consider lower scores, usually with less leverage. Clearing high-rate balances can also improve your debt-to-income ratio, which helps the file.

How long does it take?+

A cash-out refinance commonly takes 30 to 45 days. A home equity loan is often quicker, especially when the lender can value the home without a full appraisal. Payoffs can be sent directly to creditors at closing.

Model your payoff with us.

A 3-minute application. A soft-credit rate estimate. We structure and place your file with the lender that fits it.

See My Debt Payoff Options
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