Remortgage to Clear Debt: How One Couple Regained Financial Control

Managing multiple high-interest debts while juggling reduced household income can bring immense financial stress. In this real-life example, we explore how a debt consolidation remortgage helped a couple from the UK reclaim financial stability, increase their disposable income, and gain breathing space during a challenging life transition.

Customer Overview: A Family in Transition

A married couple in their 30s from the UK—an employed professional and a trainee driving instructor—found themselves in financial difficulty. With only one active income while the husband retrains for a new career, their monthly expenses exceeded income, forcing them to rely on credit. They decided to remortgage to effectively clear their debt and address the accumulating financial stress, since lacking savings created a cycle that was becoming increasingly unsustainable.

Challenges: Rising Outgoings and Debt Dependency

The couple’s situation deteriorated due to:

• Living on one income while the husband completed training
• Unexpected financial setbacks including car trouble, salary payment issues, and HMRC miscalculations
• Lack of sufficient savings to buffer against emergencies
• Three large credit card balances totaling £20,734, with interest rates ranging between 25% and 30%

Monthly credit repayments stood at £621, making it hard to cover essentials and increasing the risk of missed payments, which is why they considered a strategic remortgage.

The Mortgage Solution: Debt Consolidation Remortgage

We recommended a debt consolidation mortgage—an effective approach for those with significant unsecured debt. This involved transferring the credit card balances into their existing mortgage, replacing several high-interest debts with one manageable monthly payment.

Here’s how it worked:

• Debts consolidated: £20,734 from three credit cards
• Monthly savings: Approx. £416.62 in disposable income
• Cost of debt before consolidation: £35,960
• Approximate cost after consolidation: £32,345.04 – a savings of £3,614.96 across the mortgage term

The clients were fully informed of the implications—such as paying interest over a longer term and converting unsecured debts into a secured loan—but deemed this route necessary and viable given their financial hardship and their plan to remortgage to clear their debt burdens.

Why This Solution Worked

This remortgage allowed the couple to:

• Eliminate crippling credit card interest rates (up to 30%)
• Consolidate payments into one manageable monthly mortgage cost
• Gain immediate monthly relief of over £400 in disposable income
• Avoid missed payments and build a foundation for future financial recovery

With the husband returning to work soon, the family projects a return to dual-income stability and anticipates rebuilding an emergency savings buffer to prevent future credit dependency.

Client Feedback

“Each month was a juggling act, and the stress was overwhelming. This solution gave us time to breathe. Now we can focus on getting back on track while knowing our bills are covered.” By opting to remortgage, they managed to clear significant debt in the process.

Frequently Asked Questions

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

This varies based on your debt amount and mortgage terms. In this case study, the clients increased their monthly disposable income by around £416.62.

Can you remortgage to fund home improvements or training costs?

Yes, remortgaging can be used for various goals, including home upgrades or personal development costs—provided your lender agrees and your affordability checks out.

Does remortgaging affect my credit score?

Initially, a hard credit check may affect your score slightly, but paying off high-interest debts can improve your credit score long term by reducing your credit utilisation ratio and improving payment reliability.

What documents are required for a remortgage application?

Typically, you’ll need:

• Proof of income (payslips, bank statements)
• Credit report and current debt statements
• ID and address verification documents
• Details of your current mortgage

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

Early repayment charges (ERCs) may apply depending on your lender and mortgage terms. Always check your mortgage agreement or speak to your advisor for full clarity.

Take Control of Your Finances Today

If you’re feeling overwhelmed by high-interest debts and looking for a solution to improve your monthly cash flow, we can help. A debt consolidation remortgage might be your pathway to financial peace of mind. Speak to one of our advisors now for a free, no-obligation consultation tailored to your personal circumstances.

Take the first step – contact us today.