45% of homeowners have considered refinancing their home to pay off debt

For many American homeowners, reviewing their monthly bills is a stressful ritual. A new survey from Rocket Mortgage finds that as costs climb and debt piles up, some people are turning to their homes for financial relief.

In fact, nearly half (45%) of homeowners who have some type of debt beyond their mortgage say they’ve considered refinancing their home to pay off high-interest debt. This is known as a cash-out refinance for debt consolidation, where a homeowner replaces their current mortgage with a larger one and uses the difference in cash to pay off other debts. It leverages the homeowner’s equity and the lower interest rate on a mortgage – compared to credit cards, for example – to allow them to pay less interest overall and simplify the number of bills they need to worry about.

Of course, a cash-out refinance doesn’t erase debt. Homeowners who go down this path could end up extending the number of years they’re making mortgage payments. But according to recent data from Rocket Mortgage, Americans who are struggling with rising debt may find the financial lifeline worth the trade-offs.

Key takeaways:

• Almost half (45%) of American homeowners have considered mortgage refinancing to pay off high-interest debt, with Gen Z and millennials showing the most openness to the idea.
• About 1 in 2 respondents (47%) say their debt load has increased by “some” or “a lot” compared with 1 year ago. Of those whose debt increased by a lot, 59% have considered a mortgage refinance to consolidate debt.
• Roughly two-thirds (61%) of homeowners say it’s “moderately,” “very,” or “extremely” difficult to manage their monthly debt payments.
• About a quarter (24%) of respondents – the highest response rate – say the sum of their non-mortgage debt is between $10,000 and $24,999.

Many homeowners feel pressure from rising debt

As the cost of living climbs, homeowners are feeling the squeeze on their budgets.

Non-housing debt for U.S. households reached $5.16 trillion in the first quarter of 2026 – up nearly 23% from the pre-pandemic level of $4.2 trillion, according to data from the Federal Reserve Bank of New York. Echoing this trend, roughly half (47%) of respondents to the Rocket Mortgage survey say their non-mortgage debt has increased over the last year, compared with only 20% who say their non-mortgage debt has decreased.

In some cases, those debt totals can feel overwhelming. The largest share of respondents – 24% – say their non-mortgage debt currently adds up to somewhere between $10,000 and $24,999. But 41% of homeowners carry more debt than that. About 16% have $25,000 – $49,999 in non-mortgage debt, 14% have $50,000 – $99,999, and 11% have $100,000 or more.

The respondents who say their non-mortgage debt increased over the last year cite different reasons for their rising debt. The most common reason was higher living expenses (30%). Others pointed to high interest rates or minimum payments (13%) as the main reason, followed by home repairs (11%), job loss or income reduction (10%), and medical bills (9%).

Where is the debt coming from?

The vast majority (78%) of survey respondents report having credit card debt, and almost half (47%) are paying off auto loans. About 29% say they’re repaying personal loans; 23% have outstanding medical bills; 22% carry debt from “buy now, pay later” programs like Klarna, Affirm, or Afterpay; and 21% are burdened with student loans.

It’s not surprising that many mortgaged homeowners are struggling with their additional debt. In student loan debt alone, the U.S. total reached $1.833 trillion as of the third quarter of 2025, with federal loans accounting for the lion’s share, according to the Education Data Initiative. Interest accruals on federal student loans that had been paused due to enrollment in the Saving on a Valuable Education (SAVE) plan also restarted in 2025 after years of legal limbo.

Major financial goals take a backseat to debt

To deal with growing debt, homeowners may start tightening their household budgets immediately. But they may also take measures that can hurt them in the long run – like sacrificing important financial goals to get their debt under better control.

When asked if they’ve delayed or abandoned any financial goals due to their non-mortgage debt, respondents cited several:

• Vacations (35%)
• Emergency savings (32%)
• Home repairs (30%)
• Major purchases (26%)
• Retirement savings (25%)
• Upgrading their home (20%)
• Family expenses, such as funding a child’s wedding or education (15%)
• Higher education (10%)
• Starting a business (8%)
• Purchasing a second home (7%)

The significant impact on emergency savings and retirement savings is particularly concerning. Without enough emergency savings, homeowners hit with unexpected expenses might turn to credit cards or other loans that wind up increasing their debt. And not being able to prioritize saving for retirement means many Americans could end up less prepared for or working longer into their golden years.

Interest rates add to the struggle

When it comes to interest rates, survey respondents are feeling the squeeze there, too. Homeowners report a range of interest rates on their highest-interest, non-mortgage debt: 5% – 9.99% for 27% of respondents, 10% – 14.99% for 19% of respondents, and 20% or higher for 17% of respondents. These were the most common responses, meaning nearly one-fifth of survey respondents are paying high interest rates of 20% or more.

With the average interest rate on a 30-year fixed-rate mortgage at 6.48% as of June 4, it’s no wonder that 45% of survey respondents have already considered refinancing their mortgage to consolidate and pay off high-interest debt. Even a small reduction in interest rates could potentially help a lot. About 61% of mortgaged homeowners juggling different types of debt say a reduction of 1% – 3% in the interest rate on their highest-interest debt would be “very” or “extremely” impactful for their finances.

For the 55% of survey respondents who say they haven’t considered refinancing their mortgage to pay off debt, the reasoning is tied to financial concerns. Among this group, 27% say current mortgage rates are too high – the largest share of responses.

Taking steps toward debt relief

With nearly one-third (30%) reporting that it’s “very” or “extremely” difficult to manage their monthly debt payments, mortgaged homeowners balancing different debts are understandably concerned about their finances.

The largest share (27%) of respondents say they worry about their non-mortgage debt on a monthly basis, but almost one-quarter (23%) report worrying about their debt every day. Another 21% say they worry about their non-mortgage debt weekly.

The good news is that most homeowners are planning to address their debts in the next year. More than half (52%) say they are “very likely” or “extremely likely” to seek lower interest rates for their non-mortgage debt within 12 months. This could come from negotiating better terms, looking into debt consolidation options, or other forms of debt relief.

A home isn’t exactly a piggy bank, though, and taking equity out of your home comes with risk. But for situations where cash-out refinancing makes sense, debt consolidation can help struggling homeowners regain more control over their finances and breathe a little easier.

Methodology

In May 2026, Rocket Mortgage conducted an online survey of 2,027 American mortgaged homeowners, age 18 and older, who all have some type of non-mortgage debt. Most questions were multiple choice, and not every respondent answered every question.

Refinancing may increase finance charges over the life of the loan.

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