How a Debt Consolidation Remortgage Helped Ease Financial Pressure

Customer Overview

A couple in their mid-40s from Northern England, working in skilled trades and local government roles, were struggling to manage several high-interest debts alongside their current mortgage. Their goal was to simplify their monthly outgoings and consider a remortgage for debt consolidation to reduce the stress building from juggling multiple payments.

The Financial Challenge: High-Interest Debts and Financial Pressure

Over the years, the couple had taken out a variety of loans and credit cards to fund home improvements and meet day-to-day expenses. These included:

• High-interest credit cards with rates from 27% to 29%
• A secured loan with an 11% interest rate
• An unsecured personal loan at 12%

They were making regular monthly payments totalling £682, but found that their balances remained stagnant due to high interest charges. Their total debt had climbed to £40,321. Despite keeping up with repayments, the couple felt they were primarily paying interest rather than reducing the principal.

The Solution: A Debt Consolidation Remortgage

After assessing their income, expenditure, and repayment capabilities, a debt consolidation mortgage was proposed. This would roll their existing high-interest debts into their mortgage—transforming unsecured obligations into secured debt with a lower interest rate over a longer period. A consolidation remortgage thus transferred their existing loans to a new mortgage structure.

Key Features of the Remortgage Plan:

• Debt of £40,321 consolidated into the mortgage
• Estimated cost of consolidated debt over the full mortgage term: £72,981.01
• Projected reduction in monthly outgoings by approximately £378.85
• Total savings over the term: £2,696.99

Although consolidating extended the total payback term, it created a manageable, single monthly payment and gave the couple a clear timeline for becoming debt-free.

Results: Greater Monthly Freedom and Reduced Stress

The immediate benefit was a significant increase in their monthly disposable income—an extra £378.85 available every month. This helped ease the constant pressure they had been feeling and gave them financial breathing room. More importantly, the clients recognised the trade-off: while they would likely pay more over the entire term of the mortgage, the peace of mind and immediate cash flow greatly improved their quality of life when they opted for the debt consolidation remortgage.

With more room in their budget, the couple also committed to building a savings buffer to avoid future reliance on credit.

“We’d been making payments for months, but the balances barely moved. This remortgage gave us a clear finish line—and finally some breathing space.”

Frequently Asked Questions

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

In this case, the couple increased their monthly disposable income by £378.85 after consolidating multiple debts into their mortgage. Your savings will vary based on your total debt and new mortgage terms.

Can you remortgage to consolidate debt?

Yes, many homeowners choose to remortgage to consolidate debt. It allows you to combine multiple high-interest debts into one lower-interest mortgage repayment. With a debt consolidation remortgage, you can streamline your repayments.

Does remortgaging affect my credit score?

Initially, applying for a remortgage can cause a small dip in your credit score due to the hard inquiry. However, consolidating and paying off debts can improve your credit score over time as your credit utilization decreases.

What documents are required for a remortgage application?

You’ll typically need:

• Proof of income (e.g., payslips, tax returns)
• Mortgage statements
• Details of debts to be consolidated
• Bank statements
• Identification documents (passport, driving license)

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

Most fixed-rate mortgages include early repayment charges (ERCs). It’s essential to check your current mortgage terms or speak with an advisor to understand any penalties for overpayment or full repayment.

Your Next Step: Explore Your Debt Consolidation Options

If you’re feeling overwhelmed by multiple credit commitments or simply want to improve your monthly cash flow, consolidating debts into your mortgage could be the solution. While it’s essential to weigh the long-term costs, the short-term financial relief can make a significant difference.

Contact us today for a personalised mortgage consultation and take the first step toward regaining control of your finances.