Remortgage to Consolidate Debt: How One Couple Reduced Monthly Outgoings by £280

Customer Overview

A married couple in their 40s, both working full-time and living in the UK, recently approached us as their existing mortgage deal was coming to an end. Despite managing their finances well and making all regular repayments, a sizable chunk of their income was being directed towards multiple high-interest credit cards and loans. In fact, they were keen to explore how a remortgage could help consolidate their debt and improve their financial position.

The Challenge: High Monthly Outgoings from Unstructured Debt

The couple were not experiencing financial distress, but they recognised an inefficient financial structure. Their commitments included:

• High-interest credit cards (25–30% APR)
• Multiple unsecured personal loans
• Monthly repayments totaling approximately £992

Although they could maintain the status quo, they were aware of the mounting interest charges and the strain on their monthly cash flow. Their aim was clear: take proactive control, restructure their debt efficiently, and increase disposable income without creating new borrowing risks. Therefore, considering how to remortgage and consolidate debt was a priority for them.

The Solution: Remortgage to Consolidate Debt

At the end of their Barclays mortgage deal, they saw an opportunity to restructure their finances through debt consolidation mortgage planning. After a full analysis of their current liabilities, lifestyle, and future financial goals, we recommended a remortgage to pay off debt totaling £36,013.

Key Features of the Remortgage Plan

• Consolidated 7 credit accounts comprising credit cards, unsecured loans, and one mail-order balance
• New mortgage structure designed to include the debts over the full term of the mortgage (repayment structure)
• Excluded low-interest promotional accounts from consolidation to minimise unnecessary costs
• Reviewed lifestyle expenses to ensure no excessive or inefficient spending

Importantly, by carrying out a structured debt consolidation remortgage, they were able to reduce their multiple high-interest repayments into a single, lower-interest mortgage repayment. As a result, their decision to remortgage for debt consolidation provided a clear structure and increased savings.

The Outcome: Lower Costs and More Financial Freedom

By choosing to consolidate their debts into their mortgage, the couple:

• Reduced their monthly outgoings by approximately £280.33
• Improved monthly cash flow and eliminated reliance on their overdraft
• Set clear goals to overpay the mortgage when possible and build long-term savings
• Saved a total of £3,271.71 in interest over the long term (assuming full term completion)

While the consolidation increases the total repayment due to mortgage terms, the couple now have a manageable surplus each month, allowing them to build stability and prepare for retirement. Moreover, their strategy of using remortgage to consolidate debt means lower interest rates and better cash flow.

“We’ve never missed a payment, but we were paying far too much interest each month. Rolling everything into the mortgage allowed us to simplify our finances, reduce the pressure, and start saving again. It’s not about taking on more debt—it’s about managing what we have better.”

– Satisfied Homeowner, UK

FAQs

How much can I save monthly by consolidating credit card debts into a mortgage?

In our case study, the homeowners reduced their monthly outgoings by approximately £280.33. Savings vary per individual based on outstanding balances, interest rates, and mortgage terms. If you wish to remortgage and consolidate debt, your monthly savings could be significant depending on your circumstances.

Can you remortgage to fund home improvements?

Yes, remortgaging can include borrowing extra funds for home improvements like a new bathroom, as long as affordability is confirmed.

Does remortgaging affect your credit score?

Initially, remortgaging may cause a minor dip due to lender checks, but consolidating high-interest debts could improve your score in the long-term if managed well. In some cases, choosing to remortgage and consolidate debt helps streamline monthly payments and has a positive impact on score.

What documents are typically required for a remortgage application?

• Proof of ID (passport, driving license)
• Proof of income (payslips, tax returns)
• Bank statements
• Mortgage statement and details of current debts

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

Most fixed-rate mortgages include Early Repayment Charges (ERCs). However, many lenders allow a percentage (commonly 10%) to be overpaid each year without penalties. Always review your agreement or consult with a broker first.

Take Control of Your Debt with a Smarter Mortgage Strategy

If you’re approaching the end of your mortgage deal or simply looking to reduce your monthly outgoings, a debt consolidation remortgage may be the right solution. It’s not about taking on “more debt”—it’s about managing existing balances with greater efficiency. Remortgage options to consolidate debt are available for those seeking to optimise their finances.

Ready to streamline your finances and increase monthly savings? Use our free remortgage calculator or speak to one of our specialist advisors today.