How a Debt Consolidation Remortgage Helped a Homeowner Regain Financial Control

Customer Overview

A homeowner in their mid-40s, residing in the UK and working in a professional role, recently faced escalating monthly outgoings due to home improvement expenses and resulting unsecured debts. With a fixed-rate mortgage nearing expiry, they sought a strategic financial solution, specifically a Deal Direct debt consolidation remortgage, to reduce their monthly repayment burden and regain control of their finances through a debt consolidation remortgage.

Challenge: Mounting Monthly Payments from Home Improvement Debts

After investing heavily in home renovations, the homeowner found costs had exceeded original estimates. To complete the works, they relied on credit cards and hire-purchase agreements, leading to high-interest, unsecured debt. Monthly payments totaled £551 across multiple providers, including:

• A credit card at 35% APR with PayPal: £2,396 balance
• High monthly car finance payments via Santander and Oodle Financial Services: £18,787 combined
• Another credit card at 35% APR with Vanquis Bank: £1,195 balance

This resulted in reduced disposable income, and despite efforts like overpaying and managing accounts well, the homeowner wanted to avoid future financial strain or potential credit issues. Consequently, they considered a Deal Direct debt consolidation remortgage as a viable option.

Solution: Tailored Debt Consolidation Remortgage

The homeowner partnered with mortgage experts to create a custom remortgage to consolidate debt. The goal was to merge £22,377.40 of unsecured debt into a new mortgage product, thereby replacing multiple high-interest, short-term debts with a single, more manageable long-term mortgage payment. Critical factors considered included:

• Prioritising high-interest and high-monthly-payment debts, a key aim of their remortgage with Deal Direct
• Avoiding inclusion of interest-free or nearly-repaid loans
• Retaining flexibility with new disposable income

After reviewing options with a qualified adviser, the client was informed of potential long-term interest implications: while monthly outgoings would drop, repaying £22,377.40 over the mortgage term would cost approximately £47,216.31 in total — a cost of £2.11 for every £1 borrowed.

Results: Improved Cash Flow and Lower Monthly Commitments

By consolidating qualifying debts into the mortgage, the homeowner achieved:

• Increased disposable income by approximately £490.58 per month
• Streamlined finances with a single monthly mortgage payment
• Improved financial stability and reduced risk of missed payments
• Capacity to rebuild savings and accelerate mortgage overpayments over time

“This approach will help simplify your finances, reduce your overall monthly outgoings, and give you more flexibility moving forward.”

The homeowner confirmed that these debts were unlikely to recur, as the borrowing primarily funded home upgrades now completed, and there were no plans for future large expenditures. The Deal Direct debt consolidation remortgage solution aligned with their goal of maintaining a strong credit profile while increasing financial security.

FAQs

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

In this case, the homeowner saved approximately £490.58 per month by rolling high-interest debts into their mortgage, significantly improving their net disposable income through a Deal Direct debt consolidation remortgage.

Can you remortgage to fund home improvements?

Yes. The homeowner initially remortgaged to raise funds for home renovations, a common use case. However, unexpected overages led to further borrowing they later consolidated.

Does remortgaging affect my credit score?

Remortgaging itself does not negatively impact your credit score, and in some cases may improve it by reducing the number of active debts and lowering monthly repayments, which can support on-time payments.

What documents are required for a remortgage application?

Typically, you will need proof of ID, income (like payslips or tax returns), address history, current mortgage details, and a credit report. Lenders may also request an income and expenditure breakdown.

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

Possibly. Most fixed-rate mortgages impose early repayment charges (ERCs) during the fixed period. However, some lenders allow limited overpayments annually (often up to 10%) without penalty. Always check your specific mortgage terms.

Take Control of Your Monthly Finances with Smart Remortgaging

If you’re facing high-interest credit card debt or struggling with multiple monthly payments, a debt consolidation mortgage may be the right solution. Our mortgage experts can help you explore tailored options, using our remortgage calculator to assess your potential savings today, particularly with a Deal Direct debt consolidation remortgage.

Contact us now to book your free consultation and take the first step toward financial freedom.