Remortgage to Consolidate Debt: How One Couple Avoided High Interest and Gained Financial Peace of Mind

Customer Overview

A couple in their 50s from the South of England, working in stable professional roles, were nearing the end of a low fixed-rate mortgage. With rising interest rates on the horizon and several unsecured debts, they sought to remortgage to clear debt while maintaining long-term financial security.

The Challenge: Mounting Debts and Expiring Rate

The couple’s fixed-rate mortgage at 1.42% was ending in just three weeks. They were concerned about:

• Moving onto a costly variable interest rate with their lender.
• Managing over £27,000 of unsecured debts tied to credit cards and loans.
• Remaining on track to repay their mortgage within the original term of 9 years and 11 months.
• Finding a quick yet suitable solution to consolidate debt into one affordable monthly payment.

The Solution: Remortgage to Consolidate Debt with Same Lender

Given the tight timeline and need for swift action, a full remortgage with a new lender wasn’t viable. Instead, the solution involved working with the existing lender, NatWest, to secure a rate switch and further advance, resulting in a combined mortgage product that:

• Fixed the rate at 4.14% for five years, providing predictability and peace of mind.
• Included a further advance to consolidate £27,842 of existing debt and raise an additional buffer of £957.
• Kept the mortgage term unchanged—ensuring no added years to repayment.
• Included no arrangement, valuation, legal, or survey fees—saving upfront costs.

This practical debt consolidation remortgage allowed them to stay on a fixed repayment plan, reducing financial complexity and avoiding excessive credit card and loan interest rates.

Monthly Impact

• New monthly mortgage payment: £1,463.37 during fixed term
• Payment after fixed period: Projected £1,557.28
• Potential long-term cost of consolidation: £37,586.70 over the life of the mortgage

The advisor clearly outlined that they would pay approximately £1.35 per £1 borrowed through the consolidation—but found this acceptable given the simplicity and immediate financial relief gained.

Results: Improved Cash Flow and Financial Clarity

By choosing a debt consolidation mortgage, the couple achieved the following outcomes:

• Freed up monthly income previously going toward high-interest credit cards.
• Stabilised finances with a 5-year fixed rate mortgage.
• Avoided the lender’s standard variable rate and the risk of unpredictable future payments.
• Bundled all their repayments into one clear and affordable monthly mortgage payment.

In Their Words

“We only had a few weeks left before our fixed deal ended. We’re so glad we were able to stay with our lender and still consolidate everything. It’s a huge weight off our shoulders.” – Homeowners in Hampshire

FAQs About Consolidating Debt Through a Remortgage

Can you remortgage to consolidate debt?

Yes, many homeowners remortgage to consolidate high-interest debts like credit cards and personal loans into their mortgage. This often results in lower interest rates and simplified monthly repayments.

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

Monthly savings depend on your interest rates and debt amounts. In this case, consolidating over £27,000 of debt helped reduce monthly outflows significantly, even with the long-term cost of repaying at mortgage rates.

Does remortgaging affect my credit score?

Remortgaging itself can involve a credit check, which may slightly impact your score in the short term. However, consolidating debt and paying it off consistently can improve your score over time.

What documents are required for a remortgage application?

Most lenders ask for ID, proof of income (e.g. payslips or tax returns), bank statements, current mortgage details, and debt information if consolidating.

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

Typically, fixed-rate products include early repayment charges. In this scenario, the lender specified charges from 4.5% in the early years, reducing to 1% by the fifth year.

Your Next Step: Speak to a Debt Consolidation Mortgage Specialist

If you’re exploring how to remortgage to pay off debt or want to see what your payments could look like using a remortgage calculator, we can help.

At Deal Direct Financial Solutions, we’ve helped thousands of homeowners consolidate their debts and secure a better financial future. Let us help you too. Explore your debt consolidation mortgage options with our team today—book your no-obligation consultation now.