How a Debt Consolidation Remortgage Helped a Couple Regain Financial Control

Customer Overview

A married couple in their 40s, both working in professional roles and living in the Midlands, sought a financial solution to manage their high-interest debts and improve monthly cash flow. They explored options with the goal of considering a consolidation remortgage as means to reduce their outgoings while staying on track to become debt-free.

Challenges Faced

The couple had accumulated over £5,000 in credit card debt, with interest rates nearing 29%. They had already made progress by independently clearing one of their cards, but the remaining debt was proving to be a financial drain. Their main concerns included:

• High monthly repayments of £158 toward one card alone
• Lack of savings to address the debt quickly
• Paying excessive interest over time if left unpaid (estimated at over £9,300)
• Limited disposable income after covering household expenses

The Mortgage Solution Provided

After a detailed review of their financial circumstances, we recommended a debt consolidation remortgage. By folding £5,270 of outstanding high-interest credit card debt into a new, secured repayment mortgage, the couple could move away from 29% credit card rates to a far lower mortgage rate.

The remortgage agreement was structured with the intent of:

• Reducing monthly outgoings by removing one high-interest card repayment
• Freeing up £652.10 per month in disposable income during the term of the original debts
• Allowing them to use the extra income to accelerate repayment of their final remaining card
• Providing a more manageable repayment timeline

We fully explained the long-term implications of consolidating unsecured debt into a secured mortgage product, including the fact that £1.23 would be repaid for every £1 borrowed, equating to a total repayment of £6,482.10 over the loan term. Despite this, the structured remortgage offered improved monthly affordability and strategic payoff planning during their consolidation journey.

Results: Financial Relief with a Long-Term Strategy

The couple’s revised mortgage payments led to significantly improved monthly cash flow. With only one high-interest credit card remaining, they’re now on a fast track to becoming completely debt-free — without being overwhelmed by mounting interest or missed payments.

Total estimated savings: £2,844.90 by consolidating one credit card’s debt.

Monthly disposable income increase: Approximately £652.10.

Repayment focus: All extra income is now directed at repaying the final credit card earlier than planned.

“By clearing this one card and freeing up hundreds monthly, we’ll be able to pay off the second card far faster — without any financial stress.”

Frequently Asked Questions

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

It depends on the amount and interest rate of the debts. In this case, the couple increased their monthly disposable income by approximately £652.10 by consolidating one credit card into their mortgage.

Can I remortgage to pay off debt?

Yes, a remortgage to clear debt can be an effective solution if you have enough equity in your home and suitable income. A consolidation remortgage allows you to pay off unsecured debts by wrapping them into your mortgage at a lower interest rate.

Does remortgaging affect my credit score?

Initially, there may be a small negative impact due to a credit check and closing of old accounts, but remortgaging to eliminate debt and make timely payments may improve your score over time.

What documents are required for a remortgage application?

Typically, proof of income (payslips or tax returns), credit reports, account statements, and ID verification are required. Your advisor will guide you through a tailored document list.

Is it better to consolidate all debts or just some?

It depends on your financial strategy. In this case, only one high-interest card was consolidated to keep mortgage borrowing as low as possible while still gaining financial breathing room. This selective approach allowed them to focus on the remaining card with improved cash flow.

Next Steps – Explore Your Options

If you’re juggling high-interest debt and looking for realistic ways to reduce stress and improve your financial position, a debt consolidation mortgage could provide the relief you need.

Ready to take control of your finances? Contact our mortgage advisors today to explore your remortgage options.