Because of its low interest rates, mortgage and/or home equity lending is usually the most effective method of borrowing available to homeowners. In fact, it’s so efficient that you can often take out a new mortgage or home equity line or loan, pay off other higher interest debts, and have a much lower monthly payment. It’s not uncommon to cut your total monthly payments in half when you consolidate debt with a home equity line or loan. Third Federal offers three different types of loan products that are typically used for debt consolidation.