Car Loan to Mortgage? Control Debt Easily (2026 Guide)

In today’s fast-paced world, juggling multiple loans can become a financial burden. You might be asking yourself, "Can I add a car loan to my mortgage?" The idea of consolidating debts into one manageable repayment is appealing. By doing so, you could potentially take advantage of lower interest rates and simplify your financial management. But is it the right move for you? Let’s delve into the details.

Understanding Adding a Car Loan to Your Mortgage

Combining a car loan with your mortgage is essentially a form of debt consolidation. This strategy involves refinancing your mortgage to include the balance of your car loan. The advantage here is that mortgage interest rates are typically lower than car loan rates. However, the process is not as straightforward as it seems and requires careful consideration of several factors.

Current Market Rates and Requirements

As of 2026, average mortgage rates in Australia range from 6.49% to 8.5%, depending on the lender and your financial profile. Car loans, on the other hand, usually carry interest rates ranging from 7% to 12%. By consolidating, you may secure a lower rate for your car loan. However, you should be aware of the additional costs and requirements involved in refinancing your mortgage to include a car loan.

When considering this option, lenders will assess your credit history, current debt levels, and your property’s equity. Generally, you need at least 20% equity in your home to qualify for refinancing. With access to over 83 lenders, Esteb and Co can help you find the best fit for your financial situation.

Steps to Add a Car Loan to Your Mortgage

If you’re considering this path, follow these steps to ensure you make an informed decision:

1. Assess Your Financial Situation: Calculate your current debts, monthly repayments, and interest rates. Determine if refinancing is a cost-effective solution.
2. Check Your Home Equity: Ensure you have sufficient equity in your property, typically at least 20%.
3. Consult a Mortgage Broker: Reach out to Esteb and Co to explore options across 83+ lenders. A broker can help identify suitable refinancing deals.
4. Compare Offers: Evaluate interest rates, fees, and terms from different lenders. Use the comparison table to aid your decision.
5. Apply for Refinancing: Once you select an offer, apply for refinancing. Be prepared to provide documentation of your financial situation.
6. Finalise the Process: If approved, your mortgage will be refinanced to include the car loan amount. Ensure you understand the new terms and conditions.

Expert Tips and Considerations

Before proceeding, here are some expert tips to consider:

• Longer Loan Term: While mortgage rates are lower, extending your car loan over a 20-30 year mortgage could result in paying more interest over time.
• Fees and Costs: Factor in refinancing fees, which can include appraisal costs, application fees, and other charges.
• Impact on Home Equity: Be cautious about depleting your home equity, as it could affect future financial decisions.
• Market Conditions: Keep an eye on interest rate trends, as changes could impact your overall savings.
• Financial Discipline: Ensure you maintain discipline with the consolidated loan to avoid accruing new debts.

Frequently Asked Questions

1. Can I refinance my mortgage to include other debts as well?
   Yes, refinancing can include multiple debts, such as credit cards, but it’s essential to evaluate the combined impact on your mortgage.
2. Will all lenders allow me to add a car loan to my mortgage?
   No, not all lenders offer this option. Working with a broker like Esteb and Co can help identify lenders who accommodate such requests.
3. How much equity do I need to refinance?
   You generally need at least 20% equity in your home to qualify for refinancing.
4. What are the risks of consolidating my car loan with my mortgage?
   Risks include a longer loan term leading to more interest payments and the possibility of higher fees.
5. How can I ensure I’m getting the best deal?
   Compare offers from multiple lenders and consider consulting a mortgage broker to access better rates and terms.
6. Is refinancing the best option for everyone?
   Refinancing depends on individual circumstances, such as current loan rates, financial goals, and home equity. It’s not suitable for everyone.
7. Can I revert back if refinancing doesn’t work out?
   Once refinancing is complete, reverting back is not typically an option without incurring additional costs and complexities.