Last reviewed: 7 August 2026
Lower rate, cheaper loan? Not when the term blows out. Compare asset finance against a mortgage cashout to see which costs more.
Separate loan. Shorter term, higher rate.
Fees
Exit Costs
Same debt rolled into the mortgage. Lower rate, longer term.
Extra Repayments
Refinance Costs
The mortgage cashout costs $14,032.43 more overall.
You save $534.03/month on the repayment, but carry the debt for 20 extra years. $20,730.43 more in interest.
More interest on the mortgage cashout
Longer to pay off on the mortgage
Lower on the mortgage
| Metric | Asset Finance | Mortgage Cashout | Difference |
|---|---|---|---|
| Loan Amount | $35,000.00 | $30,000.00 | $5,000.00 |
| Interest Rate | 8.50% | 6.15% | 2.35% |
| Loan Term | 5 yrs | 25 yrs | 20 yrs |
| Periodic Repayment | $730.08 | $196.05 | $534.03 |
| Total Interest Paid | $8,084.72 | $28,815.15 | $20,730.43 |
| Total Fees | $1,698.00 | $0.00 | - |
| Total Cost (Inc. Fees) | $44,782.72 | $58,815.15 | $14,032.43 |
| Years to Pay Off | 5 yrs | 25 yrs | 20.1 yrs |
Total interest paid on each option over the life of the loan. The gap between the lines is the extra cost.
It is what happens when a client rolls a car loan, personal loan, or other asset finance into a mortgage refinance to chase a lower interest rate, without realising the debt now runs for the remaining mortgage term — often 20-plus years — instead of the original 5-to-7-year loan term. A lower rate stretched over a much longer term can cost far more in total interest than keeping the debt separate.
Total interest is a function of rate and time, not rate alone. A car loan at 8.5% over 5 years accrues interest for 5 years. The same balance rolled into a mortgage at 6.15% over the remaining 25 years accrues interest for 25 years. The much longer term usually outweighs the lower rate.
Enter the client's actual asset finance (rate, term, fees) on one side, and what the same balance would look like added to their mortgage on the other (mortgage rate, remaining term). The calculator shows the extra interest, extra total cost, and how many extra years the mortgage side takes, plus a year-by-year interest chart.
Some asset finance contracts charge an early payout or discharge fee if refinanced early. Add it to the personal/asset finance side so the total cost comparison reflects the true cost of keeping that loan rather than rolling it in.
Yes — if the client makes extra repayments on their mortgage, enter that amount on the cashout side and the calculator will shorten the effective payoff period for that portion of debt accordingly.
Not always — cash flow relief from lower minimum repayments can matter for some clients, and paying extra to clear the rolled-in amount quickly can offset the longer-term math. This tool is designed to make the trade-off visible so it can be discussed, not to say one option is universally correct.
No. This tool is for education and illustration only. A client should get personal financial or credit advice before restructuring debt.
This tool is for education and illustration only. It is not financial or credit advice.