How to Use Your Mortgage to Clean Up Debt and Get Back on Track 

If you are carrying credit card balances, personal loans, or other high-interest debt, you’re not alone. Rising living costs and higher interest rates over the past few years have left many families stretched thin.

• The average Canadian credit card interest rate sits around 19.99% (and often higher).
• Many unsecured personal loans range between 8%–14% depending on your credit.
• In contrast, today’s 5-year fixed mortgage rates in Saskatchewan are closer to 3.9%–4.5%, with some variable rates in the low 4% range.

That gap creates a unique opportunity: you may be able to use the equity in your home — through a refinance, renewal, or home equity line of credit (HELOC) — to consolidate your higher-interest debt into a single, lower-interest payment. Done correctly, this can save hundreds of dollars every month and thousands over time.

At Huys Mortgage Group, we often meet homeowners who feel stuck in a cycle of payments. The truth is, your mortgage can be more than just a roof over your head. It can be a financial tool to clean up debt and help you get back on track.

In this guide, we’ll break down:

• The main ways Saskatchewan residents can use a mortgage for debt consolidation.
• How much you can actually save — with real-life examples.
• The benefits and the risks to be aware of.
• How a local mortgage broker can guide you through the process.

Why Your Mortgage Can Be a Debt Tool

For most people in Saskatoon and across Saskatchewan, a mortgage is their largest debt — but also their lowest-cost debt. That’s what makes it powerful as a tool for restructuring finances.

Mortgage Interest vs. Other Debts

High-interest debt grows quickly, while mortgage debt grows much more slowly because of the lower rates. Here’s how common debt types compare in today’s market:

*Approximate figures for illustration only, assuming interest-only style comparison.

The takeaway is simple:

• At 19.99%, a $20,000 balance costs over $12,000 in interest in just five years.
• Rolled into a mortgage at ~4%, the same $20,000 costs under $5,000 in interest.
• That difference is money back in your pocket — money that could be saved, invested, or used to truly pay down debt.

Why This Works in Saskatchewan

Saskatchewan homeowners can access their home equity in a few ways (we’ll detail them in the next section). The key is that lenders are willing to offer you a much lower rate when your debt is secured by your home.

This doesn’t erase your debt — but it changes the math dramatically. Instead of juggling multiple minimum payments at sky-high rates, you’re left with one structured payment at a manageable interest rate.

And when done carefully, this can be the turning point between feeling stuck in debt and finally making progress.

Options Available in Saskatchewan

There isn’t just one way to use your mortgage as a financial tool. Depending on your situation, there are several options available in Saskatchewan. The right choice depends on your equity, renewal timeline, income, and credit profile.

1. Mortgage Renewal

When your current mortgage term ends, you have the opportunity to renegotiate the rate and structure. Mortgage renewals are one of the most cost-effective moments to consolidate debt.

Pros

• No penalty for breaking your mortgage early.
• Often easier since you’re already negotiating new terms.
• Can roll in unsecured debt for one affordable payment.

Cons

• You have to wait until your renewal date.
• Limited if you don’t have much equity.

Best For: Homeowners with renewal dates approaching in the next 6–12 months who want to clean up debt at the same time.

💡 If you’re considering renewal, don’t just focus on rates — there’s much more to review. 

2. Mortgage Refinance

Refinancing means breaking your existing mortgage and starting a new one, usually to access equity or lower rates.

Pros

• Access up to 80% of your home’s value (minus what you owe).
• Can consolidate high-interest debt immediately.
• May also secure a better rate than your current one.

Cons

• Prepayment penalties may apply if you’re mid-term.
• Legal and appraisal fees.
• Resets your amortization (could extend debt if not managed).

Best For: Homeowners with significant high-interest debt who can absorb penalties and fees for long-term savings.

3. Home Equity Line of Credit (HELOC)

A HELOC is a revolving line of credit secured against your home. In Saskatchewan, lenders typically allow up to 65% of your home’s value in a HELOC.

Pros

• Flexible: borrow what you need, when you need it.
• Interest-only payments available.
• Lower rate than credit cards or unsecured loans.

Cons

• Rate is usually variable (tied to prime).
• Requires discipline — easy to re-accumulate debt.
• Payments can rise if prime increases.

Best For: Homeowners who want ongoing flexibility and are disciplined with repayment.

4. Second Mortgage

A second mortgage is an additional loan on top of your first mortgage, usually at a higher rate but still lower than unsecured debt.

Pros

• Access equity without breaking your first mortgage.
• Faster approval in some cases.
• Useful if penalties for refinancing are too high.

Cons

• Higher interest rates than a first mortgage refinance.
• Adds another payment to your budget.
• Fewer lender options in Saskatchewan compared to major centres.

Best For: Homeowners with large penalties on their first mortgage or less-than-ideal credit.

Which Option is Right for You?

• If your renewal is near → Renewal with consolidation is usually the simplest.
• If you need immediate relief → Refinance may make the most sense.
• If you want ongoing access to equity → A HELOC is flexible, but requires discipline.
• If you want to avoid breaking your first mortgage → A second mortgage could be the bridge solution.

Debt Consolidation with Your Mortgage

The power of using your mortgage to consolidate debt lies in interest savings and simplified payments. To make this clear, let’s look at two real-world style scenarios based on current Saskatchewan mortgage rates.

Scenario 1: $20,000 in Credit Card Debt

Sarah, a homeowner in Saskatoon, is carrying $20,000 on credit cards at 19.99%. She’s only making minimum payments, which means most of her money goes to interest.

Savings:

• Over $7,500 less in interest over five years.
• Monthly payment drops from $600+ to about $210.
• One simple payment instead of juggling multiple cards.

Scenario 2: $50,000 in Mixed Debt (Credit Cards + Car Loan + Personal Loan)

Jason and Melissa from Warman owe:

• $25,000 in credit cards at 19.99%
• $15,000 car loan at 8%
• $10,000 personal loan at 12%

If they refinance their mortgage to roll in this $50,000 at 4.2%:

Savings:

• Monthly payments drop from $1,270 to $265.
• Total 5-year savings in interest = $11,000+.
• Budget breathing room to pay off debt faster or save.

What These Examples Show

• Credit cards and unsecured loans eat up cash with sky-high interest.
• Rolling debt into a mortgage spreads payments out over a longer term, making them manageable.
• The trade-off: you must be disciplined. Extending debt over 20–25 years can increase total interest if you only make minimums. But if you keep paying extra toward your mortgage, you lock in the savings without dragging it out.

What Lenders Look At in Saskatchewan

Not every homeowner will automatically qualify to roll debt into their mortgage. Lenders in Saskatchewan (banks, credit unions, and mortgage lenders) follow both federal rules and provincial lending practices. Here are the key things they’ll look at:

1. Home Equity

• In Canada, you can refinance your mortgage for up to 80% of your home’s appraised value (Loan-to-Value, or LTV).
• Example: If your home in Saskatoon is worth $400,000 and you owe $250,000, you have $150,000 in equity. You could access up to $70,000 (80% of $400,000 = $320,000, minus $250,000 owed).

2. Credit Score

• Most Saskatchewan lenders look for a minimum score of 600–650 for refinances or renewals.
• The higher your score, the better your options. If your score is below 600, options shrink — but brokers may still find solutions through alternative or “B lenders.”

3. Debt Service Ratios (GDS & TDS)

Lenders use two ratios to measure how much debt you can handle:

• Gross Debt Service (GDS): No more than 39% of your gross income should go toward housing costs (mortgage, property tax, heat, condo fees if applicable).
• Total Debt Service (TDS): No more than 44% of your gross income should go toward housing plus all other debts (loans, credit cards, lines of credit).

Example:
If your household earns $90,000/year (~$7,500/month), your TDS limit would be $3,300/month. That’s the maximum total debt payment lenders will allow.

4. Employment and Income Stability

• Steady employment in Saskatoon’s major industries (healthcare, education, government, trades, agriculture, energy) makes a strong case.
• Self-employed borrowers (common in Saskatchewan’s farming and contracting sectors) may need to show 2 years of tax returns or use “stated income” programs.

5. Property Value and Location

• Urban centres like Saskatoon, Regina, and Prince Albert typically get more lender options.
• Rural properties or acreages may face stricter limits or require specialized lenders.

6. Mortgage Insurance Rules

• If your mortgage is insured through CMHC, Sagen, or Canada Guaranty, you cannot refinance beyond your original balance — but you can consolidate at renewal or use a HELOC if equity allows.
• For uninsured mortgages (usually with 20%+ down payment), you have more refinancing flexibility.

Why This Matters

Knowing these criteria helps you understand whether debt consolidation through your mortgage is realistic. Even if you don’t fit traditional bank rules, mortgage brokers in Saskatchewan often have access to dozens of lenders — including credit unions and alternative lenders — who may still approve solutions.

Benefits and Risks of Using Your Mortgage for Debt Consolidation

Using your mortgage to consolidate debt can be a game-changer, but it’s not without trade-offs. Understanding both sides helps you make an informed decision.

Benefits

1. Lower Interest Rates
   • Credit cards at 19.99% vs. mortgages at ~4%.
   • Saves thousands in interest.
2. Simplified Payments

1. One monthly payment instead of juggling multiple bills.
2. Easier to budget and stay on track.
3. Improved Cash Flow
4. Lower monthly payments free up room for savings, emergencies, or extra debt repayment.
5. Credit Score Boost
6. Paying off credit cards and loans can quickly improve your credit utilization ratio.
7. Stress Relief
8. Reduces the mental load of managing multiple creditors and due dates.

Risks

1. Extending Amortization
   • Rolling $20,000 of debt into a 25-year mortgage lowers payments but stretches out repayment.
   • Unless you make extra payments, total interest over decades could be higher.
2. Securing Unsecured Debt

1. Credit cards and personal loans are unsecured — if unpaid, they don’t risk your home.
2. Once rolled into a mortgage, your home is on the line if you can’t keep up.
3. Costs of Refinancing

1. Prepayment penalties, legal fees, and appraisal costs may apply.
2. You need to calculate if long-term savings outweigh these upfront costs.
3. Discipline Required
4. If you roll debt into your mortgage but keep racking up credit cards, you could end up in deeper trouble.

When It Makes Sense vs. When It Might Not

The bottom line: For many Saskatoon and Saskatchewan homeowners, using a mortgage to consolidate debt is one of the fastest paths to relief — but only if you’re disciplined and calculate the long-term impact.

Local Considerations in Saskatchewan

Debt consolidation through a mortgage isn’t one-size-fits-all. If you live in Saskatoon or elsewhere in Saskatchewan, there are a few local factors to keep in mind.

1. Provincial Consumer Protection

Saskatchewan has consumer protection laws in place to ensure lending practices are fair:

• Lenders must disclose all costs (interest, penalties, fees) in writing.
• Payday loans and high-interest lenders are regulated under the Consumer Protection Act.
• Homeowners considering a refinance should ask for a full cost breakdown before signing.

2. Mortgage Brokers vs. Banks in Saskatchewan

• Big banks (RBC, TD, BMO, etc.) have limited product offerings and may only present their own mortgage options.
• Mortgage brokers like Huys Mortgage Group can shop around dozens of lenders, including credit unions (Conexus, Affinity, Innovation) and trust companies.
• In smaller markets or rural areas, brokers often have access to solutions banks don’t advertise.

3. Impact of Bank of Canada Rate Decisions

The Bank of Canada reviews its policy rate several times a year, and these decisions directly affect homeowners in Saskatchewan:

• If prime drops, HELOCs and variable-rate mortgages will immediately see lower interest costs.
• If bond yields fall, fixed-rate mortgages in Saskatchewan can also edge lower.
• If rates rise, borrowing costs increase across the board, which can make consolidating sooner rather than later a smart choice.

The takeaway: major interest rate announcements are always a good reminder to review your mortgage strategy, especially if you’re carrying higher-interest debt.

Helpful Saskatchewan Resources

Not every solution is a mortgage solution. For homeowners who want extra support, here are trusted provincial resources:

• Credit Counselling Society – Saskatchewan
  Free, confidential debt advice.
  Website: http://www.nomoredebts.org
• Consumer Protection Division – Government of Saskatchewan
  Information on lending rules, payday loans, and consumer rights.
  Website: http://www.saskatchewan.ca/residents/justice-crime-and-the-law/consumer-protection
• Affinity Credit Union / Conexus Credit Union / Innovation Credit Union
  Local institutions that sometimes offer debt consolidation products.

(Note: These resources are for general information only. For personalized advice, consult a licensed mortgage professional like Huys Mortgage Group.)

When to Consider Professional Help

Many homeowners wait too long before asking for help with debt. The sooner you take action, the more options you have and the more money you can save. Here are some clear signs it may be time to talk to a mortgage professional like Huys Mortgage Group:

Signs It’s Time to Review Your Mortgage

• You’re only making minimum payments on credit cards or lines of credit.
• Your mortgage is coming up for renewal within 12 months.
• Your monthly debt payments exceed 40% of your income.
• You’re using credit cards to pay for basic expenses like groceries or utilities.
• Your credit score is dropping because of high balances or missed payments.
• You feel like your finances are controlling you instead of the other way around.

Why Talking to a Broker Helps

• More Options: Unlike banks, mortgage brokers in Saskatchewan can compare dozens of lenders to find the best fit.
• Debt Strategy: A broker doesn’t just secure a rate — they help you build a plan to clean up debt and move forward.
• Local Expertise: Understanding the Saskatchewan housing and lending market means advice that’s relevant to you.

At Huys Mortgage Group, we sit down with clients every week in Saskatoon who thought they were out of options — and we help them restructure their finances with real, practical solutions.

How Huys Mortgage Group Helps

Every homeowner’s situation is unique, which is why working with a local broker makes such a difference. At Huys Mortgage Group, we take the time to understand your full financial picture — not just your mortgage balance.

What We Can Help With

• Debt Consolidation Mortgages: Roll high-interest credit cards and loans into one lower-rate payment.
• Mortgage Renewals: Use your renewal date as a chance to restructure debt and lock in better terms.
• Refinancing: Access up to 80% of your home’s value to pay down debt or free up cash flow.
• Home Equity Lines of Credit (HELOCs): Flexible access to equity for ongoing needs.
• New Purchases: Guidance for first-time buyers or growing families in Saskatoon and across Saskatchewan.

Why Work With Us

• Local Knowledge: Based in Saskatoon, we understand the housing market, local lenders, and provincial programs.
• More Lender Options: We work with banks, credit unions, and alternative lenders to give you choice.
• Client-First Service: Our focus is on building long-term relationships, not just closing a deal.

Conclusion: Your Mortgage Can Be the Key to a Fresh Start

Carrying high-interest debt can feel overwhelming — especially when it seems like every paycheck is spoken for before it arrives. But if you’re a homeowner in Saskatoon or anywhere in Saskatchewan, your mortgage may hold the key to relief.

By consolidating debt into your mortgage, you can:

• Reduce your interest costs dramatically.
• Free up cash flow for savings and emergencies.
• Simplify your financial life with one manageable payment.

This isn’t a magic fix — it requires discipline and the right strategy. But with guidance from a trusted professional, you can shift from feeling stuck to moving forward.

At Huys Mortgage Group, we’ve helped families across Saskatchewan use their mortgages not just to own a home, but to regain financial stability and peace of mind. Whether you’re approaching renewal, considering a refinance, or simply need advice, we’re here to walk you through your options.

📞 Ready to explore how your mortgage can help you get back on track? Contact Mike Huys and the team at Huys Mortgage Group today for a free consultation.