How a Debt Consolidation Remortgage Helped One Client Boost Monthly Income by £726

Customer Overview

A man in his early 40s working full-time in a skilled professional role in the North of England was experiencing mounting financial pressure due to multiple high-interest credit card debts and unsecured loans. Exploring a debt consolidation remortgage could prove valuable in such challenging situations. Despite keeping up with payments, the rising cost of living had started to stretch his finances, leaving him anxious about his future financial stability.

The Challenge: Multiple High Interest Debts Reducing Disposable Income

Over the years, this individual accumulated nearly £53,000 in consumer debt through various sources:

• Credit cards with interest rates between 26%–30%
• Unsecured personal loans with demands exceeding £600 per month
• A hire purchase agreement at 11% interest

According to the breakdown, his monthly repayments toward all these commitments totaled approximately £1,482, leaving little room for day-to-day spending or saving. For many, a remortgage used for debt consolidation seems a reasonable approach. Due to these circumstances, the client found himself constantly worried and unable to envision when he might become debt-free.

The Solution: A Debt Consolidation Remortgage

After reviewing income and outgoings, it became clear that consolidating his outstanding debt into his mortgage was a prudent option. Deal Direct Financial Solutions structured a remortgage plan that:

• Integrated £52,984 of unsecured debt into the client’s existing mortgage
• Spread the repayments over the term of the mortgage, reducing the financial strain
• Streamlined payments into one manageable monthly amount
• Lowered the effective interest rate significantly compared to his credit cards and loans

While the total repayment over time would be approximately £61,991 due to spreading it across the mortgage term, this solution offered significant short-term relief and a clear payoff schedule, which are common advantages to choosing a remortgage for debt consolidation.

Results: Increased Monthly Income and Peace of Mind

By consolidating all debts under a remortgage, the client’s monthly outgoings reduced substantially. His net disposable income increased by approximately £726.56 per month. The benefits that came from using a debt consolidation remortgage offered improved financial breathing room and alleviated the stress of monthly debt repayments.

“I was just juggling too many payments and couldn’t see an end in sight. Thanks to Deal Direct, I now have one affordable monthly payment—and I finally feel in control of my finances again.” – Debt Consolidation Remortgage Client

Over the full term of the mortgage, the client would save approximately £15,024.72 compared to keeping the debts separate, assuming no changes in the standard variable rate.

Why This Remortgage Approach Worked

Several key factors contributed to a successful outcome and demonstrated why a remortgage debt consolidation strategy was so effective in this client’s case:

• High-interest debts were exchanged for a mortgage rate that was significantly lower
• The client had no other means of repaying the debts without hardship
• Home improvements were completed, meaning debts were unlikely to recur
• The client preferred certainty—a structured plan to repay everything with a fixed end date

Frequently Asked Questions

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

This depends on your current interest rates and debt levels. For many UK homeowners, calculating possible savings from a debt consolidation remortgage requires a careful assessment of both debts and mortgage rates. In this case, the client saved approximately £726.56 per month by consolidating nearly £53,000 into his mortgage.

Can you remortgage to fund home improvements?

Yes. In this case, the initial debt was accrued due to home improvements, and the remortgage allowed the client to manage repayments more effectively. Combining remortgage funds with debt consolidation can help you manage future borrowing for home upgrades when structured properly.

Does remortgaging affect my credit score?

Initially, applying for a remortgage may cause a small dip in your credit score. However, if you use the remortgage for debt consolidation and maintain regular payments, there can be a positive effect over time.

What documents are required for a remortgage application?

You’ll typically need proof of income (such as payslips or tax returns), identification, a credit file, and details of existing debts and your current mortgage. This is particularly important when applying for a debt consolidation remortgage as lenders require a full overview of your finances.

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

This depends on your lender and the mortgage product. Many fixed-rate mortgages have early repayment charges (ERCs). It’s especially crucial to check this when considering a debt consolidation remortgage, as early repayments could incur penalties.

Take the First Step to Financial Freedom

If you’re overwhelmed by multiple high-interest debts and want to regain control of your finances, a debt consolidation remortgage might be the solution you need. Contact our experienced advisers today to explore your options and boost your monthly income.

Get started with your free consultation now