Car Loan to Mortgage? Discover Relief & Control (2026)

Are you juggling a mortgage and a car loan, wishing there was a way to simplify your finances? You're not alone. Many Australians are exploring the possibility of combining their debts to make things more manageable. But can you actually add your car loan to your mortgage? Let's find out.

Understanding Adding a Car Loan to Your Mortgage

Rolling your car loan into your mortgage means consolidating both debts into a single loan. This can potentially lower your monthly repayments, but it also means extending the term over which you pay off your car. Understanding the implications of this financial decision is crucial.

When you combine your car loan with your mortgage, you're effectively increasing your home loan amount to pay off the car loan. This process is often referred to as refinancing. It’s important to note that while this might reduce your overall monthly payment, it could also increase the total interest paid over the life of the loan.

Current Rates, Requirements, and Options

In 2026, the Australian mortgage market offers a diverse range of refinancing options. Interest rates for mortgages currently range between 5.49% and 7.5%, depending on your financial situation and the lender. Car loans, on the other hand, typically have rates between 6.49% and 12%.

To add a car loan to your mortgage, you’ll generally need to meet certain criteria:

• Equity in Your Home: You’ll need sufficient equity to cover the increased loan amount.
• Good Credit Score: Lenders will assess your creditworthiness.
• Stable Income: Demonstrating a steady income stream is crucial.
• Debt-to-Income Ratio: Lenders usually prefer a ratio below 30%.

Here’s a comparison of possible scenarios:

Scenario	Interest Rate	Monthly Repayment
Separate Car Loan and Mortgage	Car: 8%, Mortgage: 6%	$1,200 + $500
Combined Loan	6.5% (Refinanced)	$1,600

Steps to Combine Your Car Loan and Mortgage

1. Evaluate Your Equity: Determine how much equity you have in your property to ensure you can cover the car loan.
2. Check Your Credit Score: A higher score will likely get you better terms.
3. Research Lenders: With access to over 83 lenders, Esteb and Co can help you find the best options.
4. Apply for Refinancing: Contact your lender or mortgage broker to initiate the refinancing process.
5. Submit Documentation: Provide necessary documents, such as proof of income and credit history.
6. Finalise the Loan: Once approved, your lender will pay off your car loan, and you’ll start making the new consolidated payment.

Tips and Considerations

• Long-term Costs: Be mindful of the increased interest over a longer period.
• Loan Features: Consider features like offset accounts or redraw facilities that may not be available with all loans.
• Future Plans: Reflect on your long-term financial goals, such as selling your car or property.
• Professional Advice: Consult with a financial advisor or mortgage broker for personalised advice.

Frequently Asked Questions

• Can I always add a car loan to my mortgage?
  Not always. It depends on your equity, credit score, and the lender's policies.
• Will this affect my credit score?
  Refinancing may temporarily dip your score, but consistent payments can improve it over time.
• Are there fees involved?
  Yes, refinancing can involve fees like application or exit fees. Check with your lender.
• How long does the process take?
  It typically takes 4-6 weeks, depending on your lender and documentation.
• Is this a good option for everyone?
  It depends on individual circumstances. Consider your financial goals and seek advice.

Combining your car loan with your mortgage can offer convenience and potentially lower monthly payments. However, it's important to weigh the pros and cons carefully. With Esteb and Co's access to a broad panel of over 83 lenders, you can find a solution that meets your unique financial needs. Consider seeking expert advice to ensure this strategy aligns with your long-term goals.