High-interest credit card debt is the #1 hurdle to home loan approval. Use our calculator to see how quickly you can clear your balance or how much cash flow you could unlock by rolling your debt into your mortgage.
See how much you'll save by making a higher repayment.
Note: Your minimum monthly repayment amount is calculated as a percentage of your closing balance, or a minimum dollar amount of your closing balance — whichever is higher. Check your PDS and change these amounts if your lender's amounts are different from these defaults.
When applying for a home loan, banks don’t just look at your savings; they look at your “borrowing capacity.” Every $1,000 of credit card limit you have, even if the balance is zero, can reduce your borrowing power by up to $5,000.
The “Hidden” Calculation: Did you know banks assess your borrowing capacity based on your total credit card limit, not just your balance? Even a card with $0 owing can slash your borrowing power by $20,000 or more. Our calculator shows you exactly how much extra you could borrow for a home by reducing or canceling those limits today.
Stop Guessing: Most people only pay the “Minimum Amount” requested by the bank, which can keep you in debt for decades. Our calculator shows you exactly when you’ll hit $0 based on your current repayments. Knowing your end date is the first step toward applying for a mortgage with confidence.
Stop the 20% Trap: Credit cards often charge between 18% and 26% interest, while a mortgage top-up sits at the current interest rates. By consolidating your credit card into your home loan, you can reduce your overall payments and focus on growing your wealth.
Total Interest Paid: Moving short-term debt to a 30-year mortgage can cost more in the long run unless you maintain higher repayments.
Credit Score: Before applying for any home loans, check your credit report to ensure it doesn’t show any active loans or credit cards when they’re closed. Madd loans will handle this for you before any application is submitted.
LVR Limits: Ensure your home has enough equity to allow for a “top-up” without triggering Lenders Mortgage Insurance (LMI).
Discipline: Consolidating only works if you don’t run the credit card balances back up again!
Let’s dive into the commonly asked questions about credit card debt.
Lenders assess you based on the limit of the card, not the balance. A $10k limit is treated as a $10k debt, even if you owe $0.
Often, paying off a high-interest card yields a better “return” for your borrowing capacity than adding that same amount to a deposit.
However, It’s best to let us conduct an analysis on what is the faster way to get to you to your goal of home ownership (free of charge).
It’s when you borrow slightly more against your home’s current value to pay out other debts, effectively turning 20% interest debt into ~6% interest debt.
Once a card is closed and a “letter of closure” is issued, the impact on your borrowing power is almost immediate.
Don’t stress about finding the best loan. We’ll handle it! Answer this quick question, and we’ll search our extensive network to find the ideal loan for you for free.
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Awesome! We’ll get right on this. Please fill out the form and the team will be in touch.
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