Debt Consolidation Mortgage: A Practical Approach to Home Improvement and Credit Management

Customer Overview

A woman in her early 40s, employed in the education sector and based in the Midlands, approached us seeking a Deal Direct debt consolidation mortgage as a financial solution to support the completion of her home improvement project. She had already used credit cards, a personal loan, and her savings to fund the majority of the project but wanted assistance in managing the remaining works and associated debts.

The Challenge: Managing High-Interest Debts Amid Property Renovation

While not in financial difficulty, this customer had accumulated approximately £15,901 in credit card debt with high interest rates—31% and 32%—as a result of funding an extension and home renovations. Despite making all repayments on time, she became concerned about the long-term implications of her unsecured borrowing. Her tipping point was being declined for additional borrowing by Halifax, which prompted worries about her credit profile and her future dealings with debt consolidation mortgages.

The Solution: Secured Loan for Debt Consolidation and Home Improvement

We arranged a secured loan against the value of her property to consolidate two high-interest credit cards and release additional equity to complete remaining home improvements. This tailored solution included a Deal Direct debt consolidation mortgage, allowing her to:

• Clear £15,901 of unsecured credit card debts
• Reduce her monthly financial commitments
• Free up disposable income amounting to approximately £95.21 per month
• Avoid taking on additional unsecured credit that might further impact her credit score

Although securing this debt against her home resulted in a longer repayment term—and a total repayment cost of £42,773.69—it provided immediate financial relief and strategic control over her credit portfolio.

Debt Overview Before Consolidation

• Halifax Credit Card: £10,970 at 31% interest
• NatWest Credit Card: £4,931 at 32% interest
• Total Estimated Cost If Not Consolidated: £31,965

Reasoning Behind the Decision

While she had the option to continue repaying as-is, the exponential interest charges were of concern. She had already exhausted all savings and couldn’t find any lifestyle expenses to cut. Her focus was completing the kitchen and home renovations without incurring further unsecured debts. She consciously avoided consolidating lower-cost commitments like car finance or personal loans, opting instead to target only the high-interest burden, facilitated by a mortgage that consolidated her debts.

Outcome: Financial Clarity and Improved Cash Flow

This strategic move allowed the customer to:

• Remove two high-cost credit card debts
• Access funds to complete her home project
• Improve cash flow with a net disposable income increase
• Begin a plan for financial recovery and savings reversal after renovations are complete

Client Testimonial:

“I wasn’t struggling financially, but it just made sense to simplify my commitments and finish the house without racking up more credit card debt. Once it’s done, I can focus on rebuilding savings and overpaying the mortgage. It felt like the right choice long-term.” – Midlands-based homeowner

Frequently Asked Questions

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

In this case, the customer saved approximately £95.21 per month in disposable income after consolidating her high-interest credit card debt into her mortgage.

Can you remortgage or take a secured loan to fund home improvements?

Yes, using a remortgage or secured loan to release equity for home improvements is a common strategy—especially when coupled with debt consolidation for financial efficiency.

Does consolidating debts into a mortgage affect my credit score?

Over time, consolidating high-interest unsecured debts into a mortgage can positively impact your credit score by reducing credit utilization and simplifying your credit profile.

What documents are required for a secured loan application?

The required documents typically include:

• Proof of ID (passport or driving license)
• Proof of address (utility bill or bank statement)
• Recent mortgage statement
• Details of debts to be consolidated
• Proof of income (e.g., payslips or bank statements)

Will I end up paying more if I consolidate debts into a mortgage?

You might repay more over time due to the extended term. For example, in this case, the customer is estimated to pay £10,808.69 more in total compared to maintaining the original repayment schedules. However, this trade-off can be worthwhile for lower monthly payments and financial flexibility.

Take Control of Your Finances Today

Are you carrying high-interest credit card debt while managing home costs or looking to simplify your finances? A debt consolidation mortgage may offer the structure and peace of mind you need. Speak with our expert advisors today to explore your options using a free remortgage calculator or request a consultation to discuss your personal circumstances. Consider talking to Deal Direct for expert guidance.

Let us help you build a path toward financial stability and long-term savings.