Personal Loan – Relief by Rolling into Mortgage (2026)

Are you feeling overwhelmed by the weight of multiple debts? You're not alone. Many Australians are seeking ways to manage their financial burdens more effectively, and one option that often comes up is rolling a personal loan into a mortgage. This strategy can potentially simplify your payments and reduce your interest costs, but how does it really work, and is it the right move for you?

Understanding Rolling a Personal Loan into a Mortgage

In essence, rolling a personal loan into your mortgage means combining your existing personal loan debt with your mortgage, resulting in a single, consolidated loan. This approach can be appealing because it often leads to a lower overall interest rate compared to personal loans. However, it's crucial to understand the implications and processes involved to make an informed decision.

Key Information: Rates, Requirements, and Options

Interest rates for personal loans in Australia typically range from 6.49% to 12%, whereas home loan rates are generally lower, ranging from 4% to 6% in 2026. By consolidating your personal loan into your mortgage, you could potentially reduce your interest payments significantly. However, extending the loan term might mean paying more in interest over time.

To roll your personal loan into your mortgage, you'll need to meet certain eligibility criteria, including having enough equity in your home and meeting the lending criteria of your mortgage lender. Esteb and Co, with its access to 83+ lenders, can help you explore your options and find a suitable solution.

How to Roll a Personal Loan into a Mortgage: Step-by-Step Guide

1. Assess Your Financial Situation: Determine the outstanding balance of your personal loan and evaluate the equity available in your home.

2. Consult with a Mortgage Broker: Seek advice from an experienced mortgage broker, such as those at Esteb and Co, to understand your refinancing options.

3. Compare Lenders and Products: Use the comprehensive panel of 83+ lenders available through Esteb and Co to compare interest rates and loan features.

4. Apply for Refinancing: Once you've selected a suitable lender, submit your refinancing application, including all necessary documentation.

5. Finalise the Loan: Upon approval, your new mortgage will pay off your existing personal loan, consolidating your debt into one manageable repayment.

Tips and Considerations

Evaluate the Long-Term Costs: While rolling your personal loan into a mortgage may reduce your monthly payments, consider the total interest over the life of the loan, which may increase if the term is extended.

Check for Fees and Charges: Be aware of any fees associated with refinancing, including discharge fees for your personal loan and potential application fees for the new mortgage.

Maintain a Strong Credit Score: A good credit score will improve your chances of securing a favourable interest rate, so ensure you manage your credit responsibly.

Seek Professional Advice: Each financial situation is unique, so consulting with a professional mortgage broker can provide tailored advice and help you navigate the complexities of refinancing.

Frequently Asked Questions

1. Can I roll any type of personal loan into my mortgage?
Generally, unsecured personal loans can be consolidated into a mortgage, but it's important to check with your lender for specific eligibility criteria.

2. Will rolling my personal loan into my mortgage affect my credit score?
Refinancing can temporarily impact your credit score due to the credit inquiries and account changes, but paying down debt consistently will improve your score over time.

3. How much equity do I need to roll a personal loan into my mortgage?
Most lenders require at least 20% equity in your property, but this can vary. A mortgage broker can help assess your situation.

4. Can I roll multiple personal loans into my mortgage?
Yes, you can consolidate multiple personal loans, but the total amount must be within the equity limits and borrowing capacity.

5. Are there any tax implications for rolling a personal loan into a mortgage?
There are typically no tax benefits for personal debt consolidation, but always consult a tax professional for personalised advice.

6. How long does the refinancing process take?
Refinancing can take anywhere from 2 to 6 weeks, depending on the complexity of your situation and the lender's processing times.

7. Is it worth rolling a personal loan into a mortgage if I'm planning to sell my home soon?
If you plan to sell your home in the near future, the costs of refinancing may outweigh the benefits. Consider your short-term plans carefully.