Debt Consolidation Remortgage Helps Homeowner Reduce Stress and Improve Cash Flow with Barclays

Anonymous Customer Case Study

A 42-year-old professional from Hampshire contacted us after reaching the end of his fixed mortgage term. With a full-time job and a growing concern over high-interest debt, he sought a practical solution to manage monthly payments and consolidate his existing financial obligations using Barclays debt consolidation remortgage services.

Customer’s Challenges

Several key challenges prompted his decision to explore remortgaging options:

• His current fixed rate mortgage was ending in just a few months.
• He needed a lender flexible enough to include repayment of a secured loan in the new mortgage—which his current lender wouldn’t allow without hiring a solicitor.
• He wanted to consolidate over £103,000 in unsecured debts, primarily credit cards and loans, to reduce monthly outgoings.
• It was important to keep monthly mortgage payments under £2,500 for personal affordability.

The Remortgage Solution

After reviewing several options, we recommended a debt consolidation remortgage with Barclays, one of the few lenders offering both competitive rates and flexibility in affordability assessments. The Barclays debt consolidation remortgage offered key details including:

• Fixed 2-year rate at 3.87% with no tie-in beyond the fixed term
• £410,000 loan over 20 years on a capital and interest repayment basis
• No fees for legal or valuation services, and the arrangement fee of £999 was added to the mortgage
• Lender’s affordability calculations ignored the commitments being repaid, enabling full consolidation

Why This Product Was Chosen

• The customer preferred a 2-year fixed rate, expecting interest rates to decline in the near future
• This option allowed him to fix a manageable monthly payment now and reassess in two years
• Lenders like HSBC and NatWest offered lower rates but couldn’t meet the borrowing requirements particular to a Barclays debt consolidation remortgage.

Achieved Results and Financial Benefits

By opting for this remortgage to pay off debt, the customer achieved:

• Monthly payments of £2,462.66—comfortably under his £2,500 ceiling
• Full consolidation of £103,383 in loans and credit card debt into a single, lower-interest product
• Improved cash flow and peace of mind from having one predictable monthly payment
• Capital buffer of £1,085 added to the loan in case balances were slightly higher

While we did inform the customer that turning short-term debts into long-term secured loans would increase overall interest costs (approximately £172,649.61 over 20 years), he prioritized immediate affordability and peace of mind.

“I feel a lot better now that the monthly payment is manageable, and all my debts are under one roof. I can finally breathe easier.”

Frequently Asked Questions (FAQs)

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

This depends on your total debt, interest rates, and mortgage term. In this case, the customer’s previous monthly outgoings exceeded £3,100. After remortgaging, his new monthly payment dropped to £2,462.66, generating immediate savings in monthly cash flow.

Can you remortgage to consolidate debt?

Yes. Many homeowners use remortgage options to consolidate loans, credit cards, and even secured debt. However, it’s critical to assess the long-term costs of converting unsecured short-term debts into long-term secured obligations.

Does remortgaging affect my credit score?

Initially, your score might dip due to hard credit checks. However, consolidating debts and consistently making payments can improve your score over time by reducing unsecured debt balances.

What documents are required for a remortgage application?

Generally, you’ll need ID, proof of income (e.g., payslips or SA302s), recent bank statements, and details of your existing mortgage and debts.

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

Most fixed-rate mortgages include Early Repayment Charges (ERCs). In this case, the customer was aware of a 2% ERC (£8,220.48) if repaid before Dec 2027. Always check your lender’s terms before overpaying or exiting a fixed deal.

Ready to Consolidate Debt and Reduce Monthly Payments?

If you’re wondering “can I remortgage to consolidate debt?”—the answer is yes, and we’re here to help. Our expert advisers compare hundreds of deals—from high-street banks to specialist lenders—to find the best remortgage for your needs.

Click here to speak with a specialist and explore your options today →