If you’re like many people, there’s a good chance you owe a balance on your credit card.1 If you’re not paying off the full balance each month before interest kicks in, you could quickly rack up debt—especially with average assessed credit card interest rates sitting above 20% in the third quarter of 2025.2
The good news? You may be able to use your home’s equity to gain control of your debt. At Newrez, we strive to provide ways for you to meet your financial and homeownership goals. Refinancing your mortgage to consolidate higher-interest debt could be a powerful strategy for finding debt relief and taking the reins on your finances.
The Problem with High-Interest Credit Card Debt
Credit card accounts that were assessed interest in Q3 2025 averaged 22.83% in interest, according to the Federal Reserve.2 Even if you’re reliably making a minimum monthly payment, the double-digit interest rate could result in you paying much more than you planned.
How Refinancing† Can Help
Refinancing your mortgage could grant you budget flexibility in more way than one. You could:
- Refinance to a new loan term, granting you lower monthly payments spread over a longer timeline, thus freeing up your monthly budget to put funds towards other debts
- Pull cash from your home’s equity in a cash-out refinance and use it to repay higher-interest debt
Notably, in the third quarter of 2025, Newrez’s refinance rates averaged less than a third of average assessed credit card interest during the same period. (Rates will vary by product and depend on your qualifications—speak to a Newrez loan expert for details.)
Knowing this, let’s look at a potential refinance strategy:
- You refinance your mortgage to get cash from your home’s equity
- That cash goes directly towards paying off your credit card balances
- Instead of possibly juggling multiple credit card bills with double-digit interest rates, you now have one mortgage payment, likely at a lower interest rate than those credit cards.
Even if your new mortgage rate is the same or slightly higher than your original loan, the shift from 20%+ interest on credit card debt to a single-digit mortgage rate could be a massive financial win.
The Potential Benefits of Using a Refinance to Consolidate Debt
- Lower Monthly Payments: Replacing credit card payments with one manageable mortgage bill may reduce monthly costs by saving you money on interest.
- Simplified Finances: You could say goodbye to stacks of bills with multiple due dates.
When This Strategy Makes Sense
Refinancing to consolidate debt isn’t for everyone, but it may be the right move if:
- You’re a homeowner with equity built up in your home
- You want to eliminate high-interest obligations
- You’re ready to take control of your finances and make a long-term reset
This isn’t just about saving a few bucks a month—you may be able to change your financial trajectory with a smart long-term strategy.
Ready to Restructure Your Debt?
We want to provide you with pathways to your goals. If high-interest credit card debt is weighing you down, tapping into your home equity could provide you with the funds to set yourself free from high-interest credit card debt.
Talk to a loan advisor today to explore your options or use our refinancing calculator to see how much you could save.
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