Debt Consolidation Remortgage: How One Client Secured a Lower Rate and Increased Financial Freedom

Client Overview

A 40-year-old professional based in southern England reached out to review his mortgage options after having secured a deal two years prior, during a period of higher interest rates. With increasing pressure from credit card debt and a desire to reduce monthly outgoings without sacrificing financial plans, he sought a remortgage solution that offered both cost savings and debt consolidation. This is where Accord debt consolidation remortgage options come into play.

The Challenges

• Existing mortgage held with Halifax on a high-rate product.
• Wished to release equity to pay off £2,961 in credit card debt.
• Mortgage lender (Halifax) unable to approve remortgage due to debt-to-income constraints.
• Preferred a fixed monthly payment under £1,000 to maintain household budgeting goals.
• Desired a shorter initial fixed mortgage term—believing interest rates may fall again in the future.

Mortgage Solution Provided

After evaluating multiple lenders, the client was recommended a product from Accord Mortgages, who did not apply a rigid debt-to-income ratio and could offer the borrowing needed for both remortgage and debt consolidation. The Accord debt consolidation remortgage product provided the flexibility required.

Key Product Details:

• Interest Rate: Fixed at 4.42% until November 2027
• Loan Amount: £204,000
• Term: 33 years
• Monthly Payment: Approximately £983.55
• Fees: £495 arrangement fee added to the loan
• Portability: Mortgage is portable during the initial deal period
• Overpayment Option: Up to 10% per year allowed without penalty

The client chose a 2-year fixed-rate product believing rates may decrease further in the short-to-medium term, offering flexibility without being tied into a long-term deal. Other options—while offering slightly better cost-saving over the fixed rate—were dismissed due to stricter borrowing criteria and higher rates.

Why This Solution Worked

This remortgage allowed our client to:

• Consolidate nearly £3,000 of high-interest unsecured debt into the mortgage.
• Keep monthly repayments under his set limit of £1,000.
• Improve cash flow by eliminating monthly credit card repayment obligations.
• Gain peace of mind with fixed payments for 2 years while retaining flexibility for future rate changes.

The client fully understood that consolidating short-term debt over a long mortgage term increases the total interest paid—estimated at £7,254.45 on this case—but proceeded after careful risk consideration and affordability assessments. Choosing an Accord debt consolidation remortgage allowed this balance to be struck effectively.

“Even with the increased term, it was worth it to get better control over my finances and stop the spiralling interest on my credit card. This also gave me some breathing space and a lower monthly payment,” – Anonymous Client

Frequently Asked Questions

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

It depends on your credit card repayment terms and new mortgage rate, but many clients save £100–£300 per month by consolidating. In this case, the client eliminated nearly £3,000 in credit card debt and achieved a monthly mortgage payment of about £983.55.

Can you remortgage to fund debt consolidation?

Yes. A debt consolidation remortgage allows you to release equity from your home to pay off unsecured debts like credit cards or personal loans, wrapping them into your mortgage. This reduces monthly outgoings but can increase total interest paid over time. An Accord debt consolidation remortgage can be an effective strategy for achieving this goal.

Does remortgaging affect my credit score?

Initially, your credit score may dip slightly due to a hard credit check and a new loan account. However, if you use the funds to reduce credit utilization (such as paying off debts), your score may improve in the medium term.

What documents are required for a remortgage application?

• Proof of income (e.g. payslips or SA302 for self-employed)
• Bank statements (typically last 3 months)
• Identification documents (passport or driver’s license)
• Information about your current mortgage and financial commitments

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

That depends on your lender’s terms. Most fixed-rate mortgages include early repayment charges (ERCs) during the fixed term, often 1%-5% of the balance. However, most lenders allow up to 10% overpayment annually penalty-free—as was the case in this recommendation.

Conclusion

By carefully assessing market options and understanding what would align with his lifestyle and financial goals, this homeowner successfully used a debt consolidation mortgage to reduce overall monthly expenditure and relieve financial pressure. Even with the added long-term cost, the short-term gain gave him breathing space and future flexibility.

Thinking of doing the same? Whether you’re looking to remortgage to pay off debt or access better rates, our expert advisers can help you navigate the process with clarity and tailored recommendations.

Start your remortgage journey now — Contact our advisors today.