How a Debt Consolidation Remortgage Helped One Family Save Over £12,000

Customer Overview

This case involves a married couple in their late 40s, working in professional roles and residing in the UK. Over the years, they had accumulated a significant amount of unsecured debt, primarily from credit cards, personal loans, and hire purchase agreements. These debts were largely the result of home improvement costs and general living expenses.

The Challenge: High-Interest Debts and Financial Stress

The couple were shouldering over £87,000 in unsecured debt, paying more than £2,200 per month across multiple creditors. With high-interest rates reaching up to 29%, they found themselves barely covering the monthly interest, making little impact on the actual balances.

Despite managing to meet payments, it was becoming an increasing strain. Their monthly outgoings had begun to exceed their income, causing distress and leaving no room for savings or financial flexibility. With no substantial savings or unnecessary spending to cut back, they needed a transformative financial solution—fast.

The Solution: Debt Consolidation Remortgage

The couple opted to remortgage their home early, taking advantage of reduced interest rates to consolidate their existing unsecured debts into their new mortgage. This strategic move allowed them to:

• Roll £87,644 of expensive credit card, personal loan, and hire purchase debts into their mortgage
• Reduce their monthly debt-related outgoings significantly
• Move all commitments into one manageable, lower-interest monthly mortgage payment

By stretching the repayment over the mortgage term, their immediate monthly expenses were drastically lowered—even though this meant they would ultimately pay around £113,938 over the lifetime of the consolidated debt.

Why the Full Consolidation Approach Was Chosen

After reviewing their income and expense sheet, and given that the debts had already caused significant monthly strain, a full consolidation of high-interest, high-balance debts was deemed appropriate. The couple preferred to retain a few lower-interest commitments and pay them manually from their increased disposable income.

Results and Financial Impact

• Monthly Disposable Income Boosted: Approximate increase of £2,703.03
• Total Interest Savings: Estimated £12,952.80 saved across the lifetime of the debts
• Number of Commitments Reduced: Simplified finances by eliminating multiple dues
• Lower Interest Rates Secured: Replacing several 27–29% APR credit cards with a much lower mortgage rate

“We were just treading water every month. Now, with all the major debts rolled into our mortgage, we not only have financial breathing room, but we’ve also started a savings pot for the first time in years.”

FAQs About Debt Consolidation Remortgages

Can you remortgage to consolidate debt?

Yes, remortgaging to consolidate debt is a common financial strategy. It allows you to pay off existing high-interest commitments by incorporating them into your mortgage, ideally at a much lower interest rate.

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

In this case, the couple increased their monthly disposable income by over £2,700 by consolidating. Individual results will depend on current debts, interest rates, and the mortgage deal secured.

Does remortgaging affect my credit score?

Initially, your credit score may dip slightly due to the credit inquiry and closing of older accounts, but in the long run, it can improve as your utilization drops and payments become more manageable.

What documents are required for a remortgage application?

• Proof of income (payslips, bank statements)
• Credit report and outstanding debt statements
• ID and address verification
• Mortgage account statement

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

Most fixed-rate mortgages have early repayment charges (ERCs). It’s essential to check the terms in your mortgage agreement or consult your mortgage advisor to review potential penalties.

Start Your Financial Reset Today

If your monthly debt payments are keeping you from living the life you want, a debt consolidation mortgage might be your path to financial clarity. Our team has helped many homeowners across the UK just like you regain control and reduce stress by restructuring their mortgage.

Contact us now for a personal consultation and explore how remortgaging your home could unlock real financial freedom.