Q. Should we pay off our $28,000 in credit card debt with a cash-out refinancing? We currently have a 15-year fixed-rate mortgage at 5.65%, with a balance of $60,000 and a monthly payment of $920. We also owe $42,000 on a home equity line of credit at 7.25%. We are only paying the interest and our payments are about $280 a month, for a total of $1,200. Our home was appraised at $145,000 in March 2006.

A. We usually urge borrowers to hold on to great mortgage rates like 5.65%. But with home loans as reasonable as they are right now it makes sense to consolidate your mortgage debt and pay off your credit cards.

With good credit you can get a 15-year fixed rate for about 5.75% and monthly payments in the low $1,300s (principal and interest only). If you went for a 30-year fixed you would probably pay somewhere between 5.75% and 6.125%, with payments in the high 900s. Bottom line: Your monthly housing costs will be no more than you're paying now.

Our extensive database of the best mortgage rates is a good place to start looking.

If you're going to refinance (and let's assume your house is actually worth $145,000), you could do an 80% cash-out refi that would net you about $38,400.

It works like this: Your debt is $60,000 plus $42,000, for a total of $102,000. That would leave you $43,000 in equity, and if you took 80% of that you would get your $38,400.

We would never advise anyone to draw all the equity out of their home because if prices fell you would not be able to sell or refinance without coming up with additional cash.

If you took 70% of your equity, you would have $30,100 -- still enough to pay off your credit cards.

You'll save hundreds of dollars a month in interest charges on those cards, making this a profitable refinancing almost immediately.