How a Debt Consolidation Mortgage Helped This Couple Save Over £600/Month

Customer Overview

An employed couple in their late 40s living in the UK recently faced growing financial pressure. With high-interest debts and an impending higher mortgage rate, they were seeking a way to maintain their home while improving their financial situation. Despite not missing any payments, their monthly outgoings exceeded their income, leaving little room for comfort or savings.

Challenges Faced

This couple had accumulated over £72,000 in unsecured debts across multiple credit cards and personal loans. Many of these had high annual interest rates—some as steep as 44%—that resulted in huge long-term repayment costs. Their current mortgage had an interest rate of 1.84%, but with the fixed term ending soon, they faced the prospect of unaffordable monthly repayments without intervention.

Key issues included:

• Monthly credit repayments exceeding £2,100
• Growing credit card balances with minimal reduction of principal
• No savings to buffer rising mortgage payments
• A credit score impacted by the number of active credit lines
• No capacity to repay high-interest loans early without consolidation

The Mortgage Solution: Debt Consolidation Mortgage

To relieve financial pressure, the couple opted for a debt consolidation mortgage—a strategy to combine unsecured, high-interest debts into their mortgage. While this increases the total repayment amount over the term due to accrued mortgage interest, the monthly outgoings become significantly more manageable.

What Was Consolidated?

A total of £72,203 was consolidated into their mortgage, including:

• Multiple store and credit cards with APRs between 24–44%
• Personal loans taken out for home improvements and family support
• Liabilities with high monthly repayments that strained monthly cash flow

Expert Advice Considered

Some of the couple’s debts had less than two years remaining or were under £1,000. Though advised not to consolidate these due to the increased interest cost over time, the couple opted to include one such card due to its extremely high interest rate (44%).

Results and Financial Transformation

Thanks to the debt consolidation remortgage, the couple achieved the following:

• Net monthly savings: £606.68 in disposable income
• Estimated lifetime savings: £5,447.31 in interest
• Credit health improvement: Fewer credit lines helped optimise their credit profile
• Single, predictable monthly payment: Made personal finance management easier

Although the full cost of repaying the debts over the mortgage period totals £88,809.69—more than the original debt amount—the short- to medium-term benefits in financial breathing room were deemed well worth it by the couple.

What the Clients Said

“It’s the perfect time to consolidate them into one monthly payment and reduce our outgoings, knowing that the credit cards now have an end date.”

FAQs About Debt Consolidation Mortgages

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

In this case, the couple increased their monthly disposable income by approximately £606.68 by consolidating debts into their mortgage.

Can you remortgage to fund home improvements?

Yes, in fact, this couple initially used loans and credit cards to fund home renovations. Consolidating those expenses into a mortgage is a common and often-wise financial move if done with advice.

Does remortgaging affect my credit score?

Yes. It can initially dip due to a hard credit search and increased mortgage balance. However, reducing the number of credit commitments can improve scores in the long run.

What documents are required for a remortgage application?

Generally, you’ll need proof of income, bank statements, identification, and details of current debts. A credit report is also usually reviewed for debt verification.

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

This depends on the lender and terms. Most fixed-rate products carry early repayment charges (ERCs). Always review your mortgage illustration or talk to a mortgage advisor.

Start Your Debt-Free Journey Today

If mounting debts and rising interest rates are squeezing your finances, a debt consolidation mortgage might be the relief you need. Speak to our expert mortgage advisors to evaluate your options and discover how you, too, can regain financial control while planning for the future.

Ready to reduce your monthly repayments? Contact us today for a free consultation.