How a Debt Consolidation Mortgage Helped Free Up £416 Per Month

Customer Background

A homeowner in their early 40s, working in a skilled trade profession, based in the Midlands, recently reached out for help managing increasing monthly credit card payments. Despite making regular payments, the interest charges were so high that the balances remained largely unchanged each month. This customer decided to explore a debt consolidation mortgage to gain more control and unlock better financial flexibility for the future.

Main Financial Challenges

Managing High-Interest Debt

The individual had accrued around £17,900 across four credit cards from providers such as Tesco, Virgin Money, Barclaycard, and Capital One. Monthly repayments on the cards totaled £538, but up to 35% of those payments were being consumed by interest alone. Despite good payment discipline, the lack of visible progress in reducing debt balances became increasingly frustrating. This was another reason to consider a mortgage for consolidating debt.

Most of the debts originated from essential home improvements and unexpected expenses like car repairs, which were placed on credit due to the absence of emergency savings.

Limited Saving Capacity & No Emergency Buffer

With no savings to fall back on and limited options to cut ongoing expenses, there was little opportunity to sufficiently reduce the card balances without external support. The client was not struggling to make payments but was concerned about the long-term sustainability of their financial position. The prospect of consolidating current debts into their mortgage seemed sensible.

The Solution: A Debt Consolidation Remortgage

We recommended a remortgage to pay off debt using the equity already built up in their home. This strategy allowed the customer to consolidate all high-interest credit card balances into their mortgage, significantly lowering the interest rate and creating a more manageable single monthly repayment. By converting unsecured credit into a manageable mortgage, the customer experienced greater relief.

Here’s how the solution worked:

• Consolidated £17,900 of credit card debt into their mortgage term
• Freed up approximately £416.24 of monthly disposable income
• Reduced multiple credit card repayments to one affordable payment
• Enabled future mortgage overpayments to pay off the new balance faster

While this move increased the total interest paid over time (approximately £31,325 over the term), it created immediate breathing room and greater financial control. The client now also has the flexibility to build savings and create an emergency fund — reducing the risk of falling back into debt in the future.

Benefits and Outcomes

• Monthly Financial Relief: Over £400 of additional disposable income each month
• Eliminated High-Interest Credit Cards: Interest rates of 32–35% replaced by a significantly lower mortgage rate
• Improved Financial Stability: Payment structure is now simpler, predictable, and more sustainable long-term thanks to the consolidation mortgage strategy.
• Plan for Savings: Customer now has the ability to save monthly and prepare for future unexpected expenses

What the Client Said

“It’s not that I was struggling to make the payments — I was managing — but the interest was eating into everything. This lets me breathe again and actually see progress for once. Now, I can save a little each month instead of treading water.”

Frequently Asked Questions (FAQs)

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

In this case, the customer saved approximately £416.24 per month in disposable income by rolling high-payment credit cards into their mortgage.

Can you remortgage to fund home improvements?

Yes. If you have sufficient equity, you can remortgage to access funds for home upgrades or, in cases like this one, to repay the credit card balances created by home renovations using a debt consolidation mortgage strategy.

Does remortgaging affect my credit score?

Remortgaging can have a minor short-term impact on your credit score due to the credit check, but in the long run, consolidating your debts and reducing your credit utilisation ratio may improve your score.

What documents are required for a remortgage application?

Generally, you’ll need:

• Proof of income (payslips or accounts)
• Bank statements (usually 3 months)
• Details of current debts and mortgage
• Proof of ID and address

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

Many fixed-rate mortgages have early repayment charges (ERCs) during the fixed term. Always check with your lender or broker about these terms before making extra payments or changes.

Is a Debt Consolidation Mortgage Right for You?

A debt consolidation remortgage can be a smart move if you’re juggling multiple debts and looking for a more sustainable, cost-effective way to manage repayments. It’s not about bailing out — it’s about taking back control when high-interest debts are slowing you down even though you’re managing payments responsibly.

If you’d like to explore whether this could help your current financial situation, our expert mortgage advisors are here to guide you through your options.

Take the first step toward financial freedom today.

Contact us for a free debt consolidation mortgage consultation now »