The Reserve Bank of New Zealand statistics show that the average Kiwi household now spends $10 out of every $100 of after-tax income just paying interest. This includes interest on credit cards, home loans, and personal loans.
"Interest has become an important consideration for New Zealanders to manage," Wizard Home Loans boss John Grant says.
He says one way to manage interest is to consolidate your debts into your home loan.
"Debt consolidation combines all outstanding debts like car or personal loans, and credit cards into the cheapest possible source. And in most cases, it's the home loan.
Debt consolidation allows you to gather all expensive consumer debts and pay them off in the cheapest way possible - with mortgage-backed debt. It helps to reduce interest payments and to manage a number of debts at one time.
"Take for example credit cards. Instead of paying 17% or more on your credit card, you could transfer this debt into your home loan and pay less than half the interest.
"Of course, it is important to be disciplined in your credit card spending and you should consider increasing your home loan repayments to cover the debts you have consolidated into your mortgage otherwise you may find yourself going backwards.
"Debt consolidation offers the opportunity to help you save on interest and to better manage paying off your debts. One monthly payment is easier than making numerous, and one lower interest rate is certainly easier to manage than many.
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