Debt Consolidation Remortgage: Reducing Monthly Outgoings and Regaining Financial Control

Customer Overview

This case study focuses on a woman in her 30s from the UK who recently separated from her partner and is preparing to move back into her home on her own. Previously, household bills and mortgage payments were shared between two incomes. Now relying solely on her own earnings, she needed a solution to make her monthly outgoings affordable and sustainable. Many people in similar circumstances consider options like debt consolidation remortgage to improve their situation.

The Challenge: High Monthly Commitments and Rising Pressure

Following her separation, our client found herself responsible for:

• The full mortgage payment
• All household bills
• Multiple credit cards with high interest rates (29%–35%)
• An unsecured personal loan with significant monthly repayments

In total, she had £46,336 in unsecured debts, with combined monthly repayments of £1,478.

Much of this debt had built up over time due to:

• Funding home improvements
• Supporting a former partner’s business venture
• Essential personal expenses such as dental work

With no savings available and limited assets that could be quickly sold, she needed a practical way to reduce her monthly outgoings so she could afford to move back into her property independently. In such challenging financial conditions, debt consolidation remortgage is sometimes a viable option to regroup finances.

The Solution: Debt Consolidation Remortgage

After reviewing her full financial position, we recommended a debt consolidation remortgage up to 85% of the property’s value.

This involved:

• Raising additional funds through a remortgage
• Using those funds to repay £46,336 of unsecured debts
• Reducing high-interest credit card balances
• Clearing a large unsecured loan with high monthly repayments

By consolidating these debts into her mortgage, she replaced multiple high-interest commitments with one structured monthly mortgage payment, which is typical in debt consolidation remortgage cases.

Understanding the Long-Term Cost

We clearly explained the implications of consolidating unsecured debts into a mortgage:

• The total consolidated amount: £46,336
• Total repayment over the mortgage term: £96,378.88
• £2.08 repaid for every £1 borrowed
• An additional £25,171.88 in interest over the full term compared to keeping her existing mortgage structure

While the long-term cost is higher, the immediate affordability improvement was the primary objective. Across debt consolidation remortgage arrangements, reducing monthly payments can take priority for those struggling with short-term cash flow.

The Results: Immediate Monthly Relief and Improved Cash Flow

By proceeding with the remortgage to consolidate debt, her financial position changed significantly:

• Previous unsecured debt repayments: £1,478 per month
• New consolidated mortgage structure: substantially lower overall monthly commitments
• Net disposable income increased by approximately £1,263.60 per month (during the original loan terms)

This improvement means she can:

• Afford to live independently again
• Comfortably manage household bills on one income
• Reduce financial stress
• Simplify her finances into one manageable payment

As she explained during the process:

“I just need to make the monthly payments manageable so I can move back home and afford everything on my own.” This is the kind of outcome many seek with debt consolidation remortgage solutions.

Why Not a Secured Loan?

We also reviewed alternatives such as a secured loan. However, in this case, a remortgage offered:

• Better overall interest structure
• One single long-term facility
• Improved affordability assessment
• A cleaner financial reset

All risks were fully explained, including the fact that previously unsecured debts were now being secured against her home. Remortgage for debt consolidation can shift unsecured liabilities onto a secured basis, so it must be considered carefully.

Important Considerations with a Debt Consolidation Mortgage

Before proceeding, we discussed:

• The risk of paying more interest over a longer term
• The importance of not rebuilding credit card balances
• The impact on future remortgage options if new debts accumulate
• Alternative support options such as National Debtline or StepChange

We also advised against consolidating very small balances or debts with less than two years remaining where appropriate. In the context of debt consolidation remortgage, timing and debt size are important considerations.

After reviewing her income and expenditure in detail, it was clear that without consolidation, maintaining the property alone would not be affordable.

Is a Debt Consolidation Remortgage Right for You?

A debt consolidation mortgage can be suitable if:

• You have significant high-interest credit card debt
• Your monthly repayments are becoming unmanageable
• You have sufficient equity in your property
• Your priority is reducing monthly outgoings

However, it is not suitable for everyone. The long-term cost must always be carefully considered. Debt consolidation remortgage is a financial strategy that should be weighed based on individual circumstances.

Frequently Asked Questions

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

This depends on your balances and interest rates. In this case, monthly disposable income improved by approximately £1,263.60. While total interest paid increased long term, monthly affordability significantly improved thanks to debt consolidation remortgage options.

Can you remortgage to pay off debt?

Yes. If you have sufficient equity and meet lender criteria, you can remortgage to clear debt, including credit cards and unsecured loans. Lenders will assess affordability and risk carefully, and debt consolidation remortgage can be one of the approved solutions.

Does remortgaging affect my credit score?

A remortgage application involves a credit search, which may cause a small temporary impact. However, clearing large credit card balances can improve your credit utilisation ratio over time. Remortgaging for debt consolidation can also positively affect your credit in the longer term.

What documents are required for a remortgage application?

Typically, you will need:

• Proof of income (payslips or tax calculations)
• Bank statements
• Proof of ID and address
• Details of outstanding credit commitments

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

Many fixed-rate mortgages include early repayment charges during the fixed period. It’s important to check your mortgage illustration (ESIS or KFI) before making changes. Choosing a debt consolidation remortgage should take early repayment charges into account.

Take Control of Your Finances Today

If you’re struggling with high-interest debt and rising monthly commitments, a debt consolidation remortgage could help you regain control and improve affordability.

Speak to our experienced advisers today to explore your options and receive tailored, professional guidance based on your circumstances. There are many approaches to debt consolidation remortgage, so personalised advice is invaluable.

Your home may be repossessed if you do not keep up repayments on your mortgage.