Debt Consolidation Mortgage: How One Family Freed Up £1,890 Each Month

Customer Overview

A married couple in their early 40s, living in the UK and raising four children, approached us in search of a solution to reduce their monthly financial strain. The household’s primary income comes from a self-employed business owner. The family had accumulated various forms of debt due to business startup costs and everyday living expenses. Despite meeting all payment obligations, they struggled to save. They were left with only £90 in disposable income at the end of each month. Consolidating their debt into a mortgage was an alternative they explored.

Challenges Facing the Family

The family was juggling over £68,000 in high-interest debt, including multiple credit cards, overdrafts, business loans, and hire purchase agreements. Monthly repayments to these debts totals £2,058. This made budgeting tight and saving nearly impossible. The rising cost of living added pressure. Although they consistently met their payment obligations, the family feared missing payments in the future if unexpected costs arose.

Some of their existing debts had interest rates as high as 45%, with repayment terms extending into the 2030s. The couple had no savings and no lifestyle expenditure they were willing to cut. Therefore, taking a debt consolidation mortgage was their focus.

The Debt Consolidation Mortgage Solution

After reviewing all options, we assisted them in securing a debt consolidation mortgage which allowed them to move £68,915.49 worth of unsecured debt into their mortgage. This involved:

• Consolidating costly unsecured loans and credit cards into one manageable mortgage repayment
• Eliminating the burden of multiple creditors and high interest rates
• Retaining a few smaller debts to be paid off separately

The new mortgage includes these consolidated debts. Although it extends repayment and accrues more interest in the long term, it significantly improved affordability now. The couple was made fully aware of the implications, including the higher total cost of borrowing over the mortgage term—an additional £38,834. They prioritised immediate financial relief and stability.

Why a Mortgage Over a Secured Loan?

Unlike secured loans for bad credit or variable-rate options, this debt consolidation mortgage offered fixed payments and stability for the family’s budget. Mortgage rates are typically lower than those of unsecured credit products. This makes them a more affordable long-term solution, especially when consolidating debts into the mortgage.

To evaluate affordability and plan ahead, a remortgage calculator was used during the process. It helped to determine the impact on monthly payments and long-term costs. The resulting monthly mortgage payment, post-consolidation, provided significant monthly savings versus maintaining the separate debt repayments.

The Results: Improved Financial Flexibility and Peace of Mind

Before the remortgage, the couple only had £90 left over each month after paying debts and bills. After consolidating their debts into their mortgage, their disposable income increased. It went up by approximately £1,890.21 per month during the term of the original loans.

This transformative change enables them to:

• Save for emergencies and family holidays
• Avoid further debt accumulation
• Gain peace of mind about their financial future by using the debt consolidation mortgage.

“This application isn’t just about clearing debt. It’s about giving our kids a childhood with more treats and less stress for us. For the first time in years, we might actually be able to save.” – Anonymous Client

Frequently Asked Questions

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

This depends on several factors such as the total outstanding debt, interest rates, and the term of your mortgage. In this family’s case, their disposable income increased by up to £1,890.21 per month by consolidating their debts.

Can you remortgage to fund home improvements?

Yes, remortgaging can be used for a variety of purposes, including home improvements, but it depends on your affordability and equity. In this case, the priority was debt consolidation into the mortgage.

Does remortgaging affect my credit score?

Yes, it may have a temporary impact due to hard credit checks, but over time, improving payment consistency and reducing the risk of missed payments can help rebuild your credit profile.

What documents are required for a remortgage application?

You will typically need identification, proof of income (such as payslips or accounts for self-employment), recent mortgage statements, and a credit report. A full breakdown of your debts will also be required, ensuring all documents reflect the debt consolidation mortgage.

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

Many fixed-rate mortgages come with early repayment penalties. It’s important to review your mortgage’s terms for specific clauses or consult with a mortgage advisor to understand your options.

Final Thoughts and Next Steps

While a debt consolidation mortgage may increase the overall interest paid over time, it can provide critical short-term relief and restore financial stability—especially for families facing high monthly commitments and limited savings.

Consolidating debt isn’t right for everyone, but with the right guidance and an honest assessment of your finances, it can be a powerful tool to regain control and plan for the future with the help of a debt consolidation mortgage.

Ready to Explore Your Remortgage Options?

Contact our mortgage experts today to see how we can help reduce your outgoings and improve your financial wellbeing. Whether you’re looking to consolidate debt, fund home improvements, or simply secure a better deal, we’re here to help—from application to completion.