Example: consolidating $80K of high-interest debt with a refinance, and what it does to monthly cashflow

The borrower's revolving balances had crept up to roughly $80,000 at rates between 19% and 22%. Minimum payments alone were close to $2,400 a month and barely touching principal — a treadmill that gets worse, not better, over time.

Their bank had offered only a modest line-of-credit increase, which would have layered more variable debt on top rather than solving the structure.

With a home worth about $850,000, a prime (A-lender) refinance can go up to the 80% loan-to-value limit ($680,000); refinances can't be default-insured and must pass the stress test. The plan refinances the existing $420,000 mortgage to $500,000 (about 59% LTV) and uses the extra $80,000 to clear every high-interest balance. Any prepayment penalty on the existing mortgage is part of the cost comparison.

The trade-off is modelled honestly: spreading $80,000 over a 25-year amortization has a long-run interest cost, but at an assumed 5.49% versus 20%+ the monthly relief is large, and the plan pairs the refinance with prepayments from the freed cashflow so the consolidated balance is gone well before the amortization implies.

Replacing roughly $2,400/month of minimum payments with about $488/month of additional mortgage payment ($80,000 at an assumed 5.49% over 25 years) frees close to $1,900 a month. The long-run interest cost is shown up front, with a prepayment plan to shrink it. Today's rates are on our live board.