Ottawa Mortgage Blog

A Smarter Way to Tackle Debt This Year

January 21, 2026 | Posted by: Jamie Small - Ottawa Mortgage Broker

Feeling the Weight of Debt This New Year?

The start of a new year has a way of bringing financial reality into focus.

Holiday spending begins to show up on credit card statements, monthly payments feel heavier than usual, and many homeowners start asking the same question quietly: Is there a better way to manage this?

If debt has been weighing on you, you are far from alone. More importantly, you are not without options.

One of the most effective strategies we regularly explore with homeowners is debt consolidation through mortgage refinancing. When done thoughtfully, it can be a powerful step toward regaining control, reducing stress, and improving long-term financial health.

How Mortgage Refinancing Can Help You Consolidate Debt

Debt consolidation is not about masking a problem. It is about restructuring it in a way that works in your favour.
Here are the key ways refinancing can make a meaningful difference.

1. Meaningful Interest Savings

High-interest debt is expensive, especially credit cards and unsecured loans. Interest rates on these balances are often many times higher than mortgage rates, quietly draining thousands of dollars over time.

By consolidating those debts into your mortgage at a significantly lower rate, many homeowners see immediate and long-term savings. Some choose to keep their monthly payments the same and apply the interest savings directly toward their mortgage principal, shortening their amortization and reducing total interest paid over the life of the loan.

2. Lower Monthly Payments and More Breathing Room

Multiple debt payments can strain even the most carefully managed budget.

Rolling several obligations into one mortgage payment often lowers overall monthly outflows, creating much-needed flexibility. That breathing room can make it easier to stay on track, avoid new debt, and focus on bigger financial goals.

In some cases, clients choose to maintain a similar payment level to accelerate debt repayment and build equity faster. The strategy is flexible, and the right approach depends on your comfort level and objectives.

3. Less Stress Through Simplicity

There is real value in simplicity.

Managing one predictable payment instead of juggling multiple due dates, balances, and interest rates can significantly reduce financial stress. A clearer picture of your finances makes budgeting easier and decision-making more confident.

For many homeowners, this peace of mind becomes one of the most meaningful benefits of consolidation.

4. A Stronger Credit Profile

High balances on revolving credit can weigh heavily on your credit score, especially when accounts are near their limits.

When those debts are consolidated into your mortgage, they are removed from your revolving credit utilization. This often leads to a noticeable and sometimes immediate improvement in credit scores. In many cases, increases of 100 points or more are possible.

An important distinction to understand is that an increased mortgage balance does not negatively impact your credit profile in the same way consumer debt does. The structure of the debt matters.

A Strategy Built Around You

Debt consolidation is not a one-size-fits-all solution, and it is not about quick fixes.

The right approach depends on your goals, your cash flow, your long-term plans, and where you are in your mortgage journey. That is why the conversation matters.

Our role is to help you clearly understand your options, weigh the pros and considerations, and choose a strategy that genuinely improves your financial well-being. We take the time to explain everything in plain language and help you move forward with confidence, not pressure.

If you have been wondering whether consolidating debt could make a difference for you, a conversation is often the best place to start. Quietly, professionally, and with your long-term financial health in mind. For more guidance, contact me, Jamie Small your Ottawa, Ontario Mortgage Broker today!

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