How a Debt Consolidation Mortgage Gave One Client a Fresh Financial Start

Client Overview

A man in his late 40s, working in a technical role and based in the South of England, recently approached us seeking a way to deal with mounting monthly debt repayments. His fixed-rate mortgage with Leeds Building Society was coming to an end, and alongside that change, he was also managing several credit defaults and unsecured debts totalling over £87,000. Concerned about his credit profile and unable to secure help from his existing lender, he was looking for a way to remortgage, consolidate debt, and rebuild his financial foundation.

The Challenge: Adverse Credit and Unsupportive Lender

The client’s primary goal was to remortgage to a new 5-year fixed rate to maintain payment stability and clear unsecured credit commitments. However, significant defaults on his credit report posed a challenge. His current lender would not consider him for a new term due to their strict lending criteria. Additionally, the client sought to consolidate multiple debts and raise extra funds for repaying recent defaults, all while keeping monthly mortgage payments affordable as he approached retirement age.

The Debt Consolidation Remortgage Solution

After carefully reviewing the client’s entire financial picture, we recommended a debt consolidation mortgage via West One Secured Loans. This lender was selected because they were uniquely willing to assist despite the client’s adverse credit. The solution included:

• Mortgage Amount: £156,705
• Term: 24 years, extending to planned retirement age
• Rate: 5-year fixed at 7.74%
• Monthly payment: £1,218.32 during fixed term

This recommendation allowed the client to:

• Consolidate debts exceeding £87,000 into the mortgage
• Raise an additional £33,319.74 to repay defaults directly
• Reduce monthly outgoings and improve financial manageability
• Preserve affordability with a longer term, avoiding near-term financial strain

Why a Longer Fixed Rate Was Best

Due to the large and recent defaults, a shorter fixed-rate term could have left the client unable to switch providers in the future. A 5-year fixed term creates stability for rebuilding his credit, and once defaults age off his report, he can explore mainstream mortgage options again.

Affordability Built for the Long-Term

The client confirmed that the projected monthly payments were affordable. We’ve also structured the loan to avoid early repayment penalties by aligning the remortgage after his existing fixed-rate deal’s expiry.

Achieved Results: Simplicity, Stability, and a Clean Start

This debt consolidation remortgage delivered a number of key benefits:

• Eliminated over £87,000 in high-interest unsecured debt
• Lowered monthly financial outgoings to a manageable level
• Facilitated credit repair through a stable 5-year fixed rate
• Protected affordability into later working years

“No other lender I spoke to was willing to help given my credit issues. The team at Deal Direct found the only lender who could make this work and explained every step clearly to me. Now I can breathe knowing my debts are manageable, and I have a plan to repair my credit.”

FAQs: Remortgaging to Clear Debt

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

It depends on your total unsecured debt, interest rates, and new mortgage terms. In this case, the client replaced high-interest debt (likely over 20% APR) with a 7.74% mortgage rate, significantly reducing monthly obligations—even when spread over a longer term.

Can you remortgage to fund home improvements?

Yes, many clients raise capital via remortgage for renovations, provided affordability and equity are assessed. In this case, the remortgage raised funds to repay defaults—another form of financial rebuilding.

Does remortgaging affect my credit score?

Yes, initially a new credit check may impact your score slightly. However, consolidating debt and making consistent payments on time typically improves your credit over time, especially if you eliminate defaults or overdue debts.

What documents are required for a remortgage application?

You will typically need:

• Proof of income (payslips, tax returns)
• Bank statements
• Credit reports
• Mortgage statement
• Proof of ID and address

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

Most fixed-rate mortgages include early repayment charges (ERCs) if you overpay more than the annual allowance (usually 10%) or repay early. In this client’s case, the ERC diminished over the 5-year term, starting at 5% and reducing to 2% by year five.

Your Fresh Start Could Begin Today

If you’re struggling with unsecured debts, facing difficulties with your current mortgage lender, or simply want a fresh financial start, a debt consolidation mortgage might be the answer. Our experienced advisors can explore your options across specialist and mainstream lenders—even if you’ve faced credit challenges in the past.

Take control of your future—contact us today for a free, no-obligation mortgage review.