Refinancing your mortgage to pay off high-interest debt can be a strategic move, but it requires careful consideration.

Advantages:

• Lower Interest Rates: Mortgage rates are typically lower than credit card or personal loan rates, so refinancing can reduce the interest you’re paying on debt.
• Consolidated Payments: By refinancing, you can roll multiple debts into one monthly payment, making it easier to manage your finances.
• Potential Tax Benefits: Mortgage interest is often tax-deductible, which could reduce your taxable income, unlike most personal loans or credit cards.

Drawbacks:

• Risk to Your Home: Since your mortgage is secured by your home, failing to make payments could put your property at risk.
• Longer Debt Timeline: While refinancing can lower monthly payments, extending the loan term means you’ll be in debt longer and may pay more interest over time.
• Closing Costs: Refinancing comes with fees, and it may take years of savings to offset these upfront costs.

If you’re disciplined about payments and have a strong plan to reduce debt, refinancing can offer financial relief. However, carefully weigh the risks before using your home to manage personal debt.