Debt Consolidation Remortgage: A Smart Move to Secure Your Financial Future

Client Overview

A couple in their late 30s – one a full-time employed professional and the other recently transitioned to full-time employment from self-employment – residing in the UK, sought guidance on managing their financial obligations. Facing growing unsecured debts and the challenges of switching from an interest-only to a repayment mortgage, their objective was a more secure, long-term financial solution.

The Challenge: Mounting Debt and an Interest-Only Mortgage

The couple had accumulated £31,377.67 in unsecured debt over several years due to economic challenges, including the fallout of a failed self-employment venture and the impact of the COVID-19 pandemic. Additional costs related to major home repairs further strained their finances.

Key financial concerns included:

• High-interest rates on existing credit cards and loans (some as high as 50%)
• Lack of sufficient disposable income to transition to a repayment mortgage
• Inability to clear high-interest debts with current income or savings
• Risk that the mortgage would remain unpaid at term end under the interest-only model

The Solution: A Tailored Debt Consolidation Remortgage

Our team recommended consolidating as much eligible unsecured debt as possible into a new repayment mortgage. This solution was designed to accomplish three key goals:

1. Make transitioning to a repayment mortgage affordable
2. Reduce monthly outgoings by rolling costly debts into the mortgage
3. Provide long-term financial stability and ensure the mortgage would be fully repaid by the end of the term

They used a debt consolidation remortgage to combine high-interest credit cards, overdrafts, and personal loans into the mortgage. Not all debts were combined—advice was provided to exclude low-balance and short-term credit commitments, focusing on those that would provide the greatest savings and mortgage affordability impact.

Understanding the Figures

• Total debt consolidated: £31,377.67
• Estimated long-term cost of consolidation: £57,734.91
• Increase in disposable income: Approx. £439.66/month
• Effective interest per £1 borrowed: £1.84

While the total repayable amount is higher due to the extended term, the clients preferred the immediate affordability, with clear intentions to avoid future reliance on credit.

Real Results: Achieving Financial Flexibility and Stability

This debt consolidation remortgage achieved the following outcomes for the couple:

• Allowed them to move from interest-only to a full repayment mortgage
• Rolled multiple high-interest debts into a single, manageable payment
• Improved their disposable income by nearly £440 per month
• Reduced long-term reliance on credit by freeing up room in their monthly budget

Testimonial: “We were stuck with high monthly credit payments and couldn’t afford the switch to a repayment mortgage. After the remortgage, we finally feel in control of our finances.” – Anonymous Client

FAQ: Debt Consolidation Remortgages

Can you remortgage to consolidate debt?

Yes, this is a common strategy known as a debt consolidation remortgage. You roll your unsecured debts into your mortgage, streamlining payments into one and potentially lowering interest costs.

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

In this case, the clients saved approximately £439.66 per month. Actual savings vary based on the interest rates, payment terms, and mortgage type.

Does remortgaging for debt consolidation impact my credit score?

Initially, your credit score may dip due to credit checks and closed accounts. However, consolidating and paying off debt can improve your score over time if you stay current with mortgage payments.

What documents are required for a remortgage application?

Typically, you’ll need:

• Proof of income (e.g., payslips or tax returns)
• Credit report summary
• Details of current debts
• Proof of ID and address

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

If your mortgage has a fixed rate period, early repayment often incurs a charge. It’s vital to check your lender’s terms before making extra payments or switching deals.

Conclusion: Take Control of Your Debt and Mortgage Today

If you’re struggling with high-interest debts and locked into an interest-only mortgage, a debt consolidation remortgage may be the smart financial reset you need. Our expert advisors can guide you through tailored, FCA-regulated recommendations that work for your situation.

Ready to find out how much you could save? Use our remortgage calculator or speak to one of our mortgage advisors today.

Take the first step toward financial clarity and freedom—contact us now for a personalised consultation.