Refinancing mortgage 'means consolidating credit card debt'

Consolidating your credit card debt is one option when refinancing, a publication has noted.

People who are refinancing their mortgage are effectively consolidating their credit card debt, according to one publication.

A piece for Your Mortgage stated that taking out a new loan to replace the old one can mean individuals can consolidate other loans, which might include those for owed cash.

But the site warns people need to take care if they are thinking of refinancing and consider the cost of exit fees when withdrawing Aussie credit.

It added: "You may be able to save more on your monthly repayments with a lower interest rate, or with a split loan that offers the stability of fixed rates for half of your loan."

The flexibility of variable for the other half must also be taken into consideration.

This advice comes after figures from the Melbourne Institute revealed that nearly 37 per cent of Australians owed money on credit cards in the June quarter - more than those who are in mortgage debt.

By Joe Letts