How a Debt Consolidation Remortgage Helped Simplify Finances and Lower Monthly Payments

Customer Overview

A middle-aged professional couple from southern England sought financial clarity and better affordable terms as their fixed-rate mortgage deal was approaching its end. With one partner employed full-time and the couple jointly owning a home, their financial goal was to streamline repayments and reduce their monthly outgoings by consolidating their existing secured loan into a new Halifax debt consolidation remortgage deal.

The Challenge: Managing Multiple Debts and a High-Interest Secured Loan

The main challenge was the presence of two major financial commitments:

• A capital repayment mortgage nearing the end of its fixed term
• A high-interest secured loan also tied to their property

The clients were concerned about rising interest rates and aimed to act proactively by locking in a new fixed rate. Importantly, they were also looking to reduce the overall mortgage term while ensuring that monthly payments remained manageable within their budget of £1,700–£1,750.

Another issue was with their current lender, NatWest, whose additional borrowing options required separate legal representation—which would drive up costs unnecessarily.

The Solution: A Competitive Debt Consolidation Remortgage Package

After comprehensive market analysis and factoring affordability criteria, Deal Direct Financial Solutions recommended a remortgage with Halifax. This mortgage offer provided:

• Loan amount: £182,500
• Term: 11 years
• Fixed rate: 4.01% until December 2030
• Initial monthly payment: £1,715.75

Halifax emerged as the most suitable option after evaluating several other lenders. Unlike many rivals, Halifax excludes the secured loan’s monthly cost in their affordability calculations—significantly improving eligibility. They also consider overtime income, adding flexibility and accuracy to the affordability assessment.

This addressed the client’s dual goal of

• Clearing the £55,482 secured debt along with the existing mortgage balance of £126,209
• Reducing the total mortgage term while staying within budget

Why the 5-Year Fixed Term?

After weighing both 2-year and 5-year fixed options, the clients opted for the longer-term deal to provide payment stability amidst economic uncertainty. A 5-year fix helped them lock in the best Halifax debt consolidation remortgage rate with a modest product fee that was added to the mortgage to ease upfront costs.

Results: Improved Financial Management and Long-Term Savings

By choosing this path:

• £55,482 of debt was consolidated into one manageable mortgage
• A single fixed monthly payment simplified budget tracking
• Projected total repayment on the consolidated debt, including fees, was around £72,681.42
• They secured peace of mind with consistent payments for the next five years
• No early repayment charges apply after December 2030, offering future exit flexibility

“Choosing to consolidate our secured loan into the mortgage gave us structure and stability—something we really needed. Having it all under one roof just makes budgeting easier.” — Anonymous Client

Frequently Asked Questions (FAQs)

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

Monthly savings depend on the interest rates and terms of your current debts. In this case, the couple replaced two payments with one fixed monthly payment of £1,715.75—potentially reducing their monthly outgoings significantly depending on the previous loan’s rate.

Can you remortgage to fund home improvements or consolidate debt?

Yes. You can remortgage to release equity for home improvements, repay existing loans or credit cards, or combine both. Lenders will consider affordability, credit profile, and existing equity.

Does remortgaging affect my credit score?

Applying for a remortgage may involve a hard credit check, which can temporarily reduce your credit score. However, consolidating debts into one payment often helps long-term if you maintain regular repayments.

What documents are required for a remortgage application?

Typically, you’ll need:

• Proof of income (e.g., payslips, P60, SA302s)
• Annual statements for existing loans or mortgages
• Bank statements (usually 3 months)
• Identification and proof of address

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

Most fixed-rate mortgages include early repayment charges (ERCs). In this case, the clients would incur up to 5% ERC in the early years. They planned to avoid early redemption until those penalties expired in December 2030.

Take Control of Your Finances Today

If you’re considering a debt consolidation remortgage and want to simplify your finances, reduce monthly payments, or shorten your mortgage term—our expert advisors at Deal Direct can help. We search across the market to find the best mortgage lenders for debt consolidation suited to your situation.

Ready to learn how much you could save? Try our remortgage calculator or contact us today for a free, no-obligation consultation.