Debt restructuring
Debt restructuring: what to check before changing your home loan
Understand the repayment relief, total cost, loan-term and home-security risks to check before moving other debts into a home loan.
Key checks before you decide
Reviewed by emoney broker team. Updated 29 July 2026. Sources are listed below.
- Prepare a list of every debt, limit, repayment, rate and recent conduct issue before comparing structures.
- Compare total interest and the proposed loan term alongside the new monthly repayment.
- Set out what will happen to repaid credit facilities so balances do not quietly rebuild.
- Ask the current lender about hardship support early if a repayment may be missed or essential costs are under pressure.
In this guide6 sections
Find the cause of the repayment pressure
Before comparing loan structures, work out why the current repayments have become difficult, what the monthly cash flow can support and what would stop the same pressure returning.
Credit-card, car-loan, personal-loan, tax, and home-loan commitments can create several repayment dates and high monthly pressure. Moving eligible debts into a different structure may reduce that pressure in some situations, but it does not remove the need to understand how the balances built up.
Separate a temporary shock, such as illness, reduced hours, separation or a one-off expense, from a recurring gap between income and spending. A temporary problem may call for a different response from an ongoing shortfall.
Write down the monthly amount that would make the household budget workable, but keep essential costs and a realistic buffer in the calculation. If the proposed repayment only works in an unusually good month, the structure has not solved the underlying problem.
- List the event or pattern that created the repayment pressure.
- Separate temporary costs from ongoing spending commitments.
- Work out what must change so new unsecured balances do not rebuild.
Watch out
Know what changes when debt is secured by the home
Credit-card and personal-loan debt is usually unsecured. Moving it into a home loan can place that debt against the property and spread repayment over a much longer period.
The interest rate may be lower, yet paying the balance over many extra years can increase total interest. The home also becomes part of the security for debt that may previously have had no property attached to it.
Ask for a comparison that keeps the debt amount visible and shows how quickly it would be repaid under each option. If the debt is added to a long home-loan term, consider whether higher repayments or a separate loan split could preserve a shorter payoff plan.
Do not assume every debt can or should be included. Lender policy, property value, available equity, repayment history and the purpose of each debt can affect the options.
- Identify which debts would become secured against the property.
- Compare the payoff date as well as the interest rate.
- Ask whether a separate split would make the restructured balance easier to track.
- Check that the property has enough usable equity for the proposed change.
Watch out
Compare total cost with the monthly repayment
A lower repayment can come from a lower rate, a longer term, or both. Extending a short-term debt across a home-loan term can increase the total interest paid even when the monthly number falls.
Use the same debt amounts and realistic repayment assumptions when comparing the current position with a proposed structure. Include application, valuation, discharge, package, government, and advice-related costs where they apply.
Ask for the repayment, remaining term, estimated total interest, and break-even point. The comparison should also explain which debts would be paid out and whether any credit limits would remain available afterwards.
Run more than one term. A structure that looks comfortable over 30 years may look very different if the restructured balance is repaid over five or ten years. The useful comparison is the one that reflects how the household intends to clear the debt.
- Compare the proposed repayment on more than one loan term.
- Include fees and switching costs.
- Check the total interest estimate alongside the first-month saving.
- Understand which debts become secured against the home.
Prepare the complete debt picture
A useful broker review needs the balances, limits, rates, repayments, and recent conduct for every debt being considered, together with the current home-loan position.
Include credit cards even when the balance is low, because the full limit can affect lender assessment. Include car loans, personal loans, buy now pay later facilities, tax debts, and any repayment arrangements that need context.
For the home loan, prepare the balance, rate, repayment, remaining term, property value estimate, and any fixed-rate or interest-onlyHome Loans / Loan decisionsPrincipal and interest vs interest-onlyUnderstand repayment-type trade-offs before choosing an interest-only or principal-and-interest structure.Open page expiry. Do not send account numbers or sensitive statements through an unapproved channel.
Recent statements matter because they show repayment conduct and the balances that would actually need to be paid out. Tell the broker about missed payments, hardship arrangements or disputed entries before an application is prepared.
- Balance, limit, rate, repayment, and remaining term for each debt.
- Recent repayment history and any missed or arranged payments.
- Current home-loan details and a realistic property value estimate.
- Income, regular expenses, and the amount of monthly pressure to solve.
Next step
Want a broker to check this against your situation?
Share the loan goal, timing and a few key details. An emoney broker can then pick up the enquiry with the relevant context.Ask an emoney broker to review the repayment structure and trade-offs.Broker note
Build safeguards into the new structure
The post-restructure plan matters as much as the refinance itself. Without clear safeguards, repaid credit cards or new car and personal loans can recreate the same pressure alongside a larger home loan.
Discuss whether repaid credit facilities should be closed or limits reduced, how an emergency buffer will be rebuilt, and what spending or repayment system will be used. These safeguards are what make the lower repayment last.
Set a review date after settlement. Check that old debts were closed as intended, direct debits changed correctly, the first home-loan repayment is understood, and extra repayment or offsetHome Loans / Loan decisionsOffset vs redrawCompare how offset accounts and redraw may affect interest, access to cash, and loan structure decisions.Open page plans are working.
If a card or other facility must remain open, record the reason, the intended limit and how it will be managed. Leaving every limit untouched can weaken the cash-flow improvement and may still affect lender assessment.
- Decide what happens to repaid credit facilities.
- Create a realistic emergency buffer target.
- Avoid taking on a new car loan, personal loan, or credit-card balance without checking the cash-flow impact.
- Book a post-settlement and annual loan review.
Watch out
Act early when repayments are already urgent
If repayments are overdue or the household cannot meet essential costs, contact the current lender's hardship team early rather than waiting for a refinance outcome.
A refinance is not guaranteed and lender assessment can take time. Hardship support may be the more immediate conversation when repayments are already behind, enforcement action is possible, or the borrower is choosing between debt repayments and essential living costs.
A licensed broker can provide home-loan guidance, but legal, tax, financial-counselling, or insolvency questions may need the appropriate specialist.
Contacting a lender about hardship does not commit the borrower to a particular option. It opens a direct conversation about the account while longer-term advice is being sought. Keep notes of calls, emails, agreed dates and any documents supplied.
- Contact the lender early if a repayment may be missed.
- Keep records of hardship requests and agreed arrangements.
- Use an appropriate financial counsellor or specialist when the issue extends beyond home-loan structure.
Calculator next step
Home loan repayment calculator
Test whether a loan amount, rate, term, and repayment type feel workable before taking the numbers further.
- Best for
- Checking repayment comfort across purchase, refinance, or rate-change scenarios.
- What it calculates
- Weekly, fortnightly, or monthly repayments from loan amount, rate, term, frequency, and repayment type.
A broker still needs to check fees, comparison rates, offset or redraw settings, loan structure, and policy fit.
Open RepaymentsSources used
- ASIC MoneySmart debt consolidation and refinancing
ASIC MoneySmartofficial sourceChecked 29 July 2026
- ASIC MoneySmart problems paying your mortgage
ASIC MoneySmartofficial sourceChecked 29 July 2026
- ASIC MoneySmart switching home loans
ASIC MoneySmartofficial sourceChecked 29 July 2026
- ASIC MoneySmart using a mortgage broker
ASIC MoneySmartofficial sourceChecked 29 July 2026
- ASIC responsible lending obligations
ASICofficial sourceChecked 29 July 2026
This guide is general information and does not take into account your objectives, financial situation, or needs. A broker can review your circumstances before any recommendation.
Next step
Want a broker to check what applies to you?
Share the goal, timing and current loan context in Quick Check so the broker knows what needs reviewing.
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