How a Debt Consolidation Remortgage Boosted One Client’s Monthly Income and Reduced Financial Stress

Customer Overview

A woman in her 40s, working in the healthcare sector and residing in a Midlands town in the UK, found herself struggling financially following a divorce and rising living costs. With no savings and multiple high-interest credit commitments, she was looking for a long-term solution to regain financial stability and enhance her credit profile. In her case, considering a remortgage for debt consolidation became a potentially life-changing approach.

The Challenge: Mounting Debt and Limited Disposable Income

The client faced overwhelming monthly payments due to a mix of credit cards, store cards, and an unsecured loan totaling £33,460. Her monthly outgoings exceeded her income, leaving her little to no disposable income and increasing the risk of missed payments. This not only caused daily financial stress but also threatened to further damage her credit score. The debts stemmed from necessary home improvements, general expenses, and the financial impact of her divorce, making full or timely repayments nearly impossible despite her best efforts. To address these issues, exploring debt consolidation through a remortgage was considered as an option.

The Solution: A Remortgage to Consolidate Debts

Our team of mortgage experts recommended a debt consolidation remortgage — a strategic move that allowed her to transfer multiple high-interest debts into her mortgage. This approach turned her previously unsecured commitments into a secured mortgage loan, spreading repayment over the remaining mortgage term. With clear guidance provided on the long-term implications and risks, the client was fully informed and comfortable moving forward.

Debts consolidated included:

• Credit card debts with interest rates as high as 29%
• A personal loan with a remaining balance of £6,101 at 11% APR
• Total monthly debt payments before consolidation: £976

By consolidating these debts, her new mortgage payments incorporated all these liabilities, which allowed her to:

• Reduce her effective monthly expenditure on debt
• Increase net disposable income by approximately £552.02 per month
• Eliminate juggling multiple repayment dates and creditors

Cost Comparison Breakdown:

• Total debts consolidated: £33,460
• Total cost of repaying debts over standard timelines: £53,467
• Total repayment via remortgage: £56,214
• Extra cost for the convenience and reduced stress: only £2,745.80 over the full term

Results: Improved Cash Flow and Reduced Financial Pressure

Although the client will repay slightly more over time due to interest accumulated over a longer mortgage term, her day-to-day financial stress has significantly eased. With just one monthly repayment to manage and over £550 more available each month, she can now build savings and avoid further reliance on credit — key steps toward repairing her credit profile for future financial moves, such as remortgaging to a high street lender. In summary, using a remortgage as a form of debt consolidation provided substantial relief.

“I was only paying interest every month, and the balances never got smaller. Now I can breathe, save, and finally see a light at the end of the tunnel.”

Frequently Asked Questions

Can you remortgage to consolidate debt?

Yes. Many UK homeowners use a remortgage to consolidate debt, converting unsecured debts into a mortgage loan typically with a lower interest rate. This can reduce monthly payments and simplify finances. Indeed, a debt consolidation remortgage is a well-established financial strategy in such cases.

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

In this case, the client saved approximately £552 per month. Actual savings depend on the interest rates of existing debts, repayment terms, and the new mortgage rate and term. For many, consolidating credit through a remortgage for debt can make a significant difference in monthly outgoings.

Does remortgaging affect my credit score?

Initially, a remortgage may cause a small dip due to credit checks, but consolidating debt can improve your credit score over time by reducing credit utilization, avoiding missed payments, and simplifying your finances. Moreover, successful debt consolidation via remortgage can provide long-term financial benefits.

What documents are required for a remortgage application?

Generally, you’ll need proof of income, bank statements, ID, current mortgage details, and information about the debts being consolidated. Lenders often require documentation of your debt consolidation remortgage details.

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

It depends on your lender and your mortgage agreement. Early repayment charges (ERCs) may apply. It’s important to discuss this with your advisor before making any changes. When considering a consolidation remortgage for your debt, always factor in these terms.

Take Control of Your Finances Today

If you’re overwhelmed by multiple debts and want to simplify repayments, improve your monthly cash flow, and reduce financial stress, a debt consolidation mortgage may be the right solution. Speak to one of our advisors today to explore your options. Try to see if arranging your finances around one remortgage for debt consolidation would provide peace of mind.

Contact us now for a no-obligation consultation with an expert mortgage advisor.