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Refinancing or using home equity to consolidate debt can make good sense in certain circumstances. Before you dive in, explore all the pros and cons.

Refinancing and Using Home Equity for Debt Consolidation

When you need to consolidate larger amounts of debt, it makes sense to consider every option, including mortgage refinancing and using the equity you have in your house. Here are some options to consider:

  • Home equity loans are fixed-rate loans secured by your property that you may be able to use if you have enough equity. They allow you to borrow against your home’s value minus the amount of your outstanding mortgage.
  • Home equity lines of credit (HELOC) are revolving lines of credit secured by your home.
  • A cash-out refinance is a mortgage for more than you currently owe on your home, which lets you use the cash difference to pay off higher-interest debt.

Each of these will have its own rates, fees and timetables. Those details can help you determine which option makes the most sense for you, so it’s important to work with a home lending specialist who gives you that information based on your specific situation.

What You Need to Know

  • Interest rate savings. Mortgages, home equity loans and HELOCs usually have lower interest rates than credit cards.
  • Long repayment terms. Repayment is wrapped into your monthly mortgage or home equity payment over a number of years, so monthly budgets are more manageable.
  • Your home is collateral. Securing your debt with your house means you can build equity and re-use it down the road if you need to.
  • Home value matters. If you over-borrow or your home loses value, you could end up owing more than the home is worth.

When you’re in our family, we take care of yours.

.25% interest rate discount for clients.1 2

As a KeyBank client, you can qualify for a .25% interest rate discount when you buy, refinance, or open a home equity loan or HELOC with us.

Learn More

Mortgage Refinance

A new mortgage could help you save money

  • Use a cash-out refinance to get money to pay off high-interest debt
  • Gain a lower interest rate or decrease your monthly mortgage payment

Home Equity Line of Credit (HELOC)

Continuous access to credit, based on available equity

  • Revolving line of credit
  • Low variable rates, with options to lock in a fixed payment
  • Flexible payment options including fixed and interest-only
Apply Now Learn More Rates & Fees

Home Equity Loan

A lump sum secured loan and based on available equity

  • Single distribution of funds
  • Maximum loan amount is based on home’s appraised value
  • Fixed rate and fixed monthly payments
Apply Now Learn More Rates & Fees

NOTICE: This is not a commitment to lend or extend credit. Conditions and restrictions may apply. All home lending products, including mortgage, home equity loans and home equity lines of credit, are subject to credit and collateral approval. Not all home lending products are available in all states. Hazard insurance and, if applicable, flood insurance are required on collateral property. Actual rates, fees, and terms are based on those offered as of the date of application and are subject to change without notice.

To apply for the Home Equity Line of Credit or Home Equity Loan, you must: (1) Be 18 years of age or older; (2) Agree to provide additional personal and business information, if requested, such as tax returns and financial statements; (3) Certify that all information submitted in the application is true and correct; and (4) Authorize the bank/and or credit bureau to investigate the information on the application. Home Equity Line of Credit applications must live within any one of the United States except the following: AL, AZ, CA, DC, NV, or TX. For subject property outside of AK, CO, CT, ID, MA, ME, MI, NY, OH, OR, PA, UT, VT, or WA call 1-888-KEY-0018 (1-888-539-0018) for product information or to submit and application. For Home Equity Loan applicants must live within the following states: AK, CO, CT, ID, IN, MA, ME, MI, NY, OH, OR, PA, UT, VT, or WA.


To receive the 0.25% interest rate discount, borrower or members of borrower’s household must have an eligible checking AND savings account with KeyBank. A borrower’s household includes individuals and organizations that share an address and/or a familial or business relationship with the borrower. An eligible checking account includes those consumer deposit accounts designated as checking accounts by KeyBank or the KeyBank Hassle-Free Account®. An eligible savings account includes those consumer deposit accounts designated as savings accounts by KeyBank, health savings accounts, certificates of deposit, individual retirement accounts or investment accounts offered through Key Investment Services LLC (KIS).* A business checking or savings account where the borrower is designated as the business owner may also be eligible. Borrower may open eligible KeyBank accounts to qualify for the interest rate discount. Normal checking and savings account service charges apply. Refer to specific checking or savings account disclosures for details.


For fixed-rate mortgages and home equity loans, the 0.25% interest rate discount is a permanent rate reduction that will be reflected in the Promissory Note interest rate. For adjustable-rate mortgages, the 0.25% interest rate discount will apply to the initial fixed interest rate period and will be reflected in the maximum amount the interest rate can increase over the term of the loan, subject to the minimum interest rate that may be charged per the terms of the Promissory Note. For home equity lines of credit, the 0.25% interest rate discount will be applied to the margin, thereby reducing the applicable variable annual percentage rate (consisting of applicable index plus margin) for the duration of the line of credit. 

Interest rate discount may not be available for all products. May be combinable with other offers. Ask us for details.

For Home Equity Line of Credit:

Reimbursement of Lender Paid Costs: If you voluntarily close your line of credit within 36 months of the date you sign the agreement, you will reimburse KeyBank for bona fide fees it paid to third parties on your behalf in connection with the account opening and as provided in your Agreement.

For Home Equity Loan:

Reimbursement of Lender Paid Costs: If you voluntarily prepay your loan in full within 36 months of the closing date, you will reimburse KeyBank for bona fide fees it paid to third parties on your behalf in connection with the loan closing and as provided in your Promissory Note.

NMLS# 399797


Investment products offered through Key Investment Services LLC (KIS), member FINRA/SIPC and SEC-registered investment advisor. KIS is affiliated with KeyBank National Association (KeyBank).

Investment products made available through KIS are:


KIS and KeyBank are separate entities, and when you buy or sell securities you are doing business with KIS and not KeyBank.

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