Who Else Is Suffering From Christmas Debt Hangover?

According to a recent Bank of Montreal poll, 24% of the Canadians who carry over a balance on their credit cards after Christmas said it would take them at least six months to pay off their holiday debt. Yes, red truly is a Christmas color. So much for more and more Canadians living paycheck to paycheck. Now they need more paychecks to pay off that gift giving debt.

If the Christmas season put your credit card debt into dangerous territory, here’s a way to get your finances back on track. Chances are you’re paying anywhere from 10-20% interest on your credit cards. Meanwhile, you may have enough equity in your home to refinance your mortgage, consolidate your credit card debts, and end up paying mortgage interest in the 5-7% range!

The first step is talking to your mortgage advisor. I can help determine how much equity is available and advise whether debt consolidation might be right for you. Even if you have to pay a penalty to break out of your existing mortgage, that cost is usually more than covered by the interest savings of debt consolidation. I’ll do the math and show you how much you can save.

The goal of refinancing should be to save interest and get out of debt faster. It’s important to understand that you’re going to have to change your spending habits—at Christmas and year-round—or you’ll be refinancing again before you know it. The best strategy is to use the money you save from consolidation to start a saving plan or to invest in an asset that will generate a return, such as revenue property.


Lisette Amalfi, AMP
Mortgage Agent/Owner
OAC Mortgages Inc.
(905) 529-1199