Remortgage to Clear Debt and Secure a Better Future: How One Homeowner Used Equity Wisely

Customer Overview

A 50-something professional from the South of England recently approached our team for help navigating a major financial transition. This client was in the process of purchasing a new-build property off-plan and needed assistance securing a Santander 2-year fixed mortgage that would not only cover the purchase but support their long-term financial goals, including managing rental income and pension contributions.

The Challenge: A Complex Income Mix with Specific Mortgage Needs

Our client had a unique mix of income sources—employed income, rental income from buy-to-let properties, and pension expectations—all of which needed to be considered in the affordability assessment. The property was a new build, requiring a mortgage solution with a long offer validity in case of construction delays. Additionally, our client was looking for a Santander 2-year fixed mortgage under £900 monthly, wanting to keep future flexibility if rates change or the mortgage term needed to be reassessed.

The Solution: A Bespoke 2-Year Fixed Rate Mortgage from a Flexible Lender

After evaluating a full panel of leading mortgage providers, including Nationwide, HSBC, Virgin, and Barclays, we identified Santander UK Plc as the most suitable lender. Santander offered:

• Lending up to age 75 using both employed and rental income
• Inclusion of rental income in their affordability calculations
• Mortgage offers that remain valid for over six months—ideal for new-builds

The client secured a 2-year fixed rate of 3.94% on a 25-year capital and interest repayment mortgage. This structure allowed for monthly payments of just under £900, meeting the client’s budgetary constraints with the Santander 2-year fixed mortgage.

Why a 2-Year Fixed Rate?

While evaluating both 2- and 5-year fixed options, the client preferred the shorter term to retain flexibility. Believing interest rates may decrease, they plan to reassess in two years and possibly shorten the mortgage term. Although early repayment charges apply within the fixed period, the client accepted this trade-off for greater short-term savings and longer-term adaptability. A Santander 2-year fixed mortgage suited their needs perfectly.

Results and Benefits

• Secured a competitive 3.94% fixed rate mortgage with manageable monthly repayments
• Included rental income and pension provisions to support mortgage affordability
• Avoided the limitations and exclusions of other lenders regarding age and income types
• Maintained under-budget monthly repayments of £896.08
• Additional flexibility: overpayment options and portability for future moves

Quote: “The tailored advice helped me secure a mortgage that matches both my current income setup and future plans. It was great having flexibility with the term and knowing my rental income wouldn’t be an obstacle.”

Frequently Asked Questions (FAQs)

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

While this case didn’t involve debt consolidation, many clients who consolidate multiple high-interest debts into a single mortgage typically save several hundred pounds monthly, depending on loan size and interest rates.

Can you remortgage to fund home improvements?

Yes, remortgaging to release equity for renovations or home improvements is a common option. Lenders will assess the current equity and affordability to determine how much can be borrowed additionally.

Does remortgaging affect my credit score?

Remortgaging may involve a hard credit check, which could temporarily impact your credit score. However, long-term positive repayment behaviour can improve your score over time.

What documents are required for a remortgage application?

Typically, lenders request the following:

• Proof of income (payslips, tax returns, pension documents)
• Bank statements
• Details of any debts or existing mortgage accounts
• Proof of identity and address

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

Most fixed-rate mortgages carry early repayment charges during the initial term. In this case, a 2% charge applies in year one and 1% in year two. Always review terms carefully or consult your adviser for specific details.

Final Thoughts: Rebuilding for the Future with the Right Mortgage Strategy

This case highlights the power of a personalised mortgage solution. By understanding the client’s income sources, retirement plans, and future expectations, we helped secure a flexible and cost-effective mortgage that avoided common pitfalls such as affordability caps and lender restrictions.

If you’re planning a property purchase, want to remortgage to consolidate debt, or are nearing retirement with diverse income sources, we can help you chart the best course. Whether you are considering a Santander 2-year fixed mortgage or another option, our advisers provide the guidance you need.

Take the Next Step

Ready to find the right mortgage for your life situation? Whether you need a debt consolidation mortgage, want to remortgage for better terms, or just explore your options, our dedicated advisors are here to help every step of the way.

Contact us today for your personalised consultation and discover how Deal Direct Financial Solutions can work for you.