Debt Consolidation Mortgage: How One Couple Boosted Disposable Income by £572/month

Customer Overview

This case study involves a couple in their early 40s living in the UK, one employed in a skilled trades role and the other working part-time in administrative support. Frustrated by escalating monthly credit card payments despite staying on top of their bills, they sought a smarter financial solution to reduce high-interest debt and improve monthly cash flow. In this context, a debt consolidation mortgage became an appealing choice.

The Financial Challenge

Over several years, the couple had accumulated multiple credit cards totaling £33,623. These debts had arisen through essential home improvements, car expenses, and daily living costs—making up for a period of increased outgoings without any major financial crisis.

Despite steady repayments, the balances on four of their cards (carrying interest rates between 25-35%) remained frustratingly high. They were paying over £1,000 a month across these accounts, but due to the steep interest charges, their balances weren’t decreasing as quickly as expected. They had no savings to wipe out the debt immediately and feared these high-interest debts could affect their long-term financial profile. Ultimately, they began to consider a mortgage designed for debt consolidation as a solution.

The Debt Consolidation Mortgage Solution

After consulting a mortgage adviser, the couple decided on a debt consolidation mortgage. Rather than taking on another unsecured loan, they opted to remortgage and consolidate the most expensive debts into their mortgage over the long term. The solution included:

• Consolidating only the four highest-interest credit cards into the mortgage, totaling £33,623
• Switching these balances from interest rates up to 35% to a much lower secured mortgage rate
• Preserving other lower-interest or manageable balances for repayment using their increased disposable income

This careful strategy avoided increasing the loan size excessively, which would have raised the mortgage interest rate—one of the couple’s key concerns. Importantly, the consolidation was implemented in a way that freed up nearly £572.86 per month in disposable income, which they plan to use toward overpaying other debts and building an emergency savings fund. Having chosen debt consolidation with their mortgage, they now have more flexibility.

Results and Financial Impact

This mortgage-based debt consolidation brought several practical and financial benefits:

• Monthly payment reduction: Nearly £573 more each month in disposable income
• Total long-term savings: £10,534.82 saved over the mortgage term by strategically consolidating the highest-cost debts
• Improved affordability: Lower, predictable repayments at a competitive mortgage rate
• Debt plan in place: Remaining credit cards to be cleared faster thanks to increased monthly surplus

“It’s been eye-opening to see how much money we were wasting on interest each month. With this remortgage, we’ve taken control of our finances and finally feel like we’re moving forward.” – Anonymous couple

Frequently Asked Questions

Can you remortgage to consolidate debt?

Yes, remortgaging to consolidate debt involves replacing your current mortgage with a new one that includes previous unsecured debts—like high-interest credit cards. This can simplify your repayments and lower your overall monthly payments, especially when moving debt from 25-35% APR to a much lower mortgage rate. In many cases, this is a form of debt consolidation mortgage designed to help streamline finances.

Will I save money by consolidating credit card debts into my mortgage?

In this case, the clients saved approximately £10,534.82 over the term of their mortgage. However, you may pay more in interest over time if the repayment term is extended. The benefit lies in dramatically reduced monthly pressure and increased affordability, which is a key reason people choose a mortgage for debt consolidation.

Does remortgaging affect my credit score?

Initially, there may be a small dip due to a new credit search or account, but long-term, consolidating debt and lowering credit utilization can improve your credit profile—especially if you avoid further unsecured borrowing. The type of mortgage chosen, including a debt consolidation mortgage, can have an influence on your credit over time.

What documents are needed for a debt consolidation remortgage?

Typically, you’ll need:

• Proof of income (e.g. payslips or tax returns)
• Bank statements
• Details of debts to be consolidated
• Property and mortgage information

Can I repay a fixed-rate mortgage early without penalty?

Some lenders allow overpayments up to a fixed percentage each year (e.g. 10%) without penalties. Exceeding that will typically trigger early repayment charges. Check your Key Facts Illustration (KFI) or talk to your adviser.

Ready to Improve Your Financial Future?

If you’re struggling under high-interest debt but making your payments on time, a strategic remortgage may provide massive relief. Whether it’s to reduce monthly outgoings or take control of your long-term finances, our expert advisers can guide you step-by-step. Another option you may want to explore is securing a mortgage for debt consolidation purposes.

Contact us today for a free, no-obligation consultation and discover if a debt consolidation mortgage is right for you.