Whitby debt consolidation: the full math
This is the case that usually pays, and it is not a rate play — it is an interest-rate arbitrage between what a mortgage costs and what consumer credit costs. Here it is end to end on a Whitby file, using an illustrative consumer-debt load alongside the $452,562 balance from above.
| Debt | Balance | Rate | Monthly |
|---|---|---|---|
| First mortgage | $452,562 | 4.89% | $2,604 |
| Credit cards | $35,000 | 19.99% | $1,050 (3% minimum) |
| Line of credit | $15,000 | 8.49% | $256 |
| Car loan | $7,000 | 6.99% | $216 (3 yrs left) |
| Total before | $509,562 | — | $4,126 |
| After: one mortgage | $509,562 | 4.29% | $2,761 |
The monthly obligation falls by $1,365 — about $16,380 a year — and the new balance sits at 56.3% loan-to-value, inside the 80% ceiling. Against a $6,336 penalty plus roughly $2,275 of closing costs, break-even is 7 months. That is a different universe from the rate-only case, and it is why "should I refinance?" is really "what am I refinancing for?"
Now the caution nobody puts in the brochure. You have just moved $57,000 of debt from a 3-to-5-year runway onto a 25-year amortization. Left alone, that mortgage costs $318,738 in interest over its life. Keep paying the $4,126 you were already paying — the freed-up $1,365 directed straight at principal — and the whole $509,562 clears in about 13.6 years instead of 25, for $161,823 of interest. That single behavioural choice is worth roughly $156,915.
Consolidation is a cash-flow rescue, not a debt eraser, and it only works once — the cards have to stay paid off. Model your own load with the debt consolidation calculator, or read how the structure works on debt consolidation mortgages.