Remortgage to Clear Debt: How One Homeowner Boosted Disposable Income by Over £100 Monthly

Customer Overview

A woman in her late 40s living in the UK and currently on a fixed income recently faced the challenge of managing multiple high-interest unsecured loans. With limited disposable income left each month, she was unable to build savings or comfortably cover unexpected expenses. Her goal, facilitated by exploring Deal Direct debt consolidation options, was to simplify her financial commitments and free up cash flow to create a savings buffer.

The Financial Challenges

The customer was repaying two unsecured personal loans with the following conditions:

• Total debt amount: £9,705.00
• Monthly repayments: £194.00 across both loans
• Interest rates: 15% and 12%
• Debt purpose: Previous home improvements

With no available savings and very little disposable income remaining each month, she struggled to stay on top of payments while also saving for emergencies. She worried about needing to rely on further credit in the future.

Our Debt Consolidation Remortgage Solution

To address these concerns, we arranged a debt consolidation remortgage whereby her total unsecured debts of £9,705.00 were integrated into her mortgage. This allowed her to:

• Lower her monthly outgoings through one single, reduced payment
• Extend the repayment term for affordability (with full understanding of long-term cost implications)
• Free up disposable income each month to begin building a savings cushion

We thoroughly explained the implications, including the shift from unsecured to secured debt, and the fact she would be paying £1.53 for every £1 borrowed over the full mortgage term. This equated to a total repayment of £14,848.65 for the £9,705.00 consolidated.

Outcome & Benefits

Through this remortgage solution, the client achieved a notable financial shift:

• Monthly savings: Her net disposable income increased by £114.36
• Simplified payments: One manageable mortgage payment replaced two unsecured repayments
• Greater financial flexibility: She can now build a savings pot for unexpected expenses
• Reduced financial stress: Peace of mind knowing she’s not reliant on credit going forward, thanks to the debt consolidation efforts.

“I’m relieved to finally have a single monthly payment that gives me room to breathe. It’s nice knowing I’m not stuck in the same cycle of using credit just to cover life’s surprises.” – Female Homeowner, UK

Key Considerations

We always recommend that clients fully understand the long-term cost of consolidating smaller debts into their mortgage. While lower monthly payments can ease pressure, the overall cost of borrowing may increase over time due to spreading payments across a longer period.

Before completing the remortgage, the customer confirmed:

• No access to savings or alternative repayment options
• No excessive lifestyle spending available to cut
• No plans to build additional credit after this transaction

We ensured she had a full understanding of the implications and agreed that consolidating all debt into her mortgage was the most manageable and beneficial route forward.

FAQs

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

This depends on your existing interest rates and loan balance. In this case, our client saved approximately £114.36 per month by consolidating £9,705 of high-interest debt into her mortgage.

Can you remortgage to fund home improvements?

Yes, it’s common to raise funds for home improvements when remortgaging. In this case, funds previously spent on home upgrades contributed to the original debt being consolidated.

Does remortgaging affect my credit score?

Yes, a remortgage application may trigger a hard credit check, which can temporarily impact your score. However, consolidating and managing your debt responsibly can improve your score over time.

What documents are required for a remortgage application?

You typically need identification (passport or driving license), recent payslips or proof of income, existing mortgage statements, and a breakdown of current debts. Lenders might also request bank statements and a credit report.

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

Many fixed-rate mortgages come with early repayment charges. Always check the terms of your mortgage offer or speak to your broker to understand any fees involved.

Start Managing Your Finances with Freedom

If you’re struggling with debt repayments and want to consolidate into a lower, more manageable monthly payment, our debt consolidation mortgage solutions can help. Let us tailor a remortgage plan to ease your financial burden and boost your peace of mind.

Get in touch today to speak to an expert advisor and begin your journey toward financial flexibility with our Deal Direct debt consolidation service.