Debt Consolidation Calculator
Enter up to 5 existing debts and see exactly how much you'd save by consolidating with home equity. Compare cash-out refinance, HELOC, and home equity loan options — with full risk analysis and interest savings breakdown.
Enter your existing debts below. Leave balance at 0 to skip a row.
Compare monthly payment and total cost to consolidate $30,700 in debt using each home equity method.
Year-by-year: current minimum payments (at 15.0% avg rate) vs. Home Equity Loan at 8.0%.
| Year | Current Balance | Consolidated Balance | Cumulative Interest (Current) | Cumulative Interest (Consolidated) | Running Savings |
|---|---|---|---|---|---|
| 1 | $25,271 | $29,595 | $4,231 | $2,416 | $1,815 |
| 2 | $18,971 | $28,399 | $7,591 | $4,740 | $2,851 |
| 3 | $11,662 | $27,104 | $9,942 | $6,966 | $2,976 |
| 4 | $3,181 | $25,701 | $11,121 | $9,083 | $2,037 |
| 5 | $0 | $24,181 | $11,222 | $11,084 | $138 |
| 6 | $0 | $22,536 | $11,222 | $12,959 | -$1,737 |
| 7 | $0 | $20,753 | $11,222 | $14,698 | -$3,475 |
| 8 | $0 | $18,823 | $11,222 | $16,288 | -$5,066 |
| 9 | $0 | $16,733 | $11,222 | $17,719 | -$6,496 |
| 10 | $0 | $14,469 | $11,222 | $18,976 | -$7,753 |
| 11 | $0 | $12,018 | $11,222 | $20,044 | -$8,822 |
| 12 | $0 | $9,362 | $11,222 | $20,910 | -$9,688 |
| 13 | $0 | $6,487 | $11,222 | $21,555 | -$10,333 |
| 14 | $0 | $3,373 | $11,222 | $21,961 | -$10,739 |
| 15 | $0 | $0 | $11,222 | $22,109 | -$10,887 |
Using Home Equity to Consolidate Debt
Home equity debt consolidation works by borrowing against your home's equity at a lower interest rate to pay off multiple high-interest debts. Credit card rates typically run 18-30%, while home equity products are priced at 7-9%. Replacing $25,000 in credit card debt at 22% with a home equity loan at 8% saves tens of thousands of dollars in interest.
The Three Home Equity Options
Cash-out refinance: Replace your entire mortgage with a larger one and receive the difference in cash to pay off debts. Best when mortgage rates are near your existing rate. Resets the loan clock and involves full closing costs.
Home equity loan (HEL): A second mortgage for a lump sum at a fixed rate, leaving your first mortgage unchanged. Best for large, defined consolidation amounts with predictable payments.
HELOC: A revolving line of credit with a variable rate, allowing you to draw funds as needed. Best for flexible situations, but the variable rate is a risk factor.
Debt Consolidation Savings Formula
Consolidated Monthly Payment = Loan Amount × [r × (1+r)^n] / [(1+r)^n − 1]
where r = consolidation rate / 12, n = term in months
Monthly Savings = Total Current Min Payments − Consolidated Payment
Total Interest Savings = Total Interest (current path) − Total Interest (consolidated)
Weighted Average Rate = Σ(Balance × Rate) / Total Balance
The key comparison is weighted average rate of current debts vs. the consolidation rate. If your weighted average is 18% and you consolidate at 8%, every dollar of debt costs 10 percentage points less per year.
Example: The Johnson Family in Denver, CO
Home: $420,000 | Mortgage: $280,000 | Total High-Interest Debt: $28,700
| Credit Card 1 ($8,500 @ 22.99%) | $230/mo min payment |
| Credit Card 2 ($4,200 @ 19.99%) | $115/mo min payment |
| Auto Loan ($12,000 @ 7.5%) | $285/mo |
| Personal Loan ($4,000 @ 14.99%) | $115/mo |
| Total Debt / Total Payments | $28,700 / $745/mo |
| Weighted Avg Rate | 15.2% |
| Home Equity Loan at 8% / 15yr | $274/mo consolidated |
| Monthly Savings | $471/mo |
| Total Interest Savings | ~$28,000 |
The Johnsons save $471/month — enough to build a solid emergency fund and accelerate mortgage payoff. Critical note: they cut up their credit cards after consolidation to prevent reaccumulation.