How a Debt Consolidation Remortgage Helped One Homeowner Regain Financial Control

Managing multiple debts with varying interest rates can quickly become overwhelming. For one homeowner in his mid-40s from the South East of England working in a professional services role, juggling £52,984 of high-interest credit card and loan debts meant monthly anxiety and a diminishing disposable income. Through a strategic debt consolidation remortgage, he was able to reduce financial pressure, eliminate multiple payments, and improve his cash flow. Here’s how it worked.

Customer Overview

This client, a single homeowner in his 40s, had built up significant unsecured debts through a combination of home improvements, purchasing a vehicle, and general spending. With interest rates on credit cards ranging as high as 30%, and monthly payments totalling £1,482, his goal was simple: increase his monthly disposable income and regain peace of mind by consolidating his debts into his mortgage.

The Financial Challenge

Before seeking a remortgage to clear debt, the client was struggling with:

• High monthly repayments across various credit cards and unsecured loans
• Interest rates on existing debts ranging from 10% to 30%
• Having no clear view of when his debts would be repaid
• Feeling constant financial pressure due to reduced net disposable income

Despite having no missed payments, the rising cost of living added strain to an already tight budget. Saving money and improving affordability became essential.

The Debt Consolidation Remortgage Solution

Our mortgage advisors recommended a full debt consolidation mortgage by incorporating the client’s debts into a new mortgage deal. By doing so, he would:

• Consolidate £52,984 worth of credit card and loan debts
• Reduce interest rates significantly compared to existing debt
• Move from multiple debt repayments to a single manageable mortgage payment

We made the client aware that although the total cost over the life of the loan would amount to approximately £61,991.28 (meaning he would pay £1.17 for every £1 borrowed), it was still far less costly than maintaining high-interest debt long-term, which would reach over £77,000 if left untouched.

Key Financial Benefits

• Monthly savings of £726.56 by replacing all existing debt payments with one lower mortgage payment
• Total lifetime savings of £15,024.72 compared to maintaining the original repayment schedule
• More financial breathing space and a clear loan end-date

Customer Testimonial

“I finally feel like I can breathe again. Having just one payment has made it so much easier to manage my finances, and I no longer worry every month about how I’m going to make the next card or loan repayment.” – Anonymous Client

Frequently Asked Questions

Can you remortgage to consolidate debt?

Yes. A debt consolidation remortgage allows you to combine high-interest debts (e.g., credit cards, loans) into your mortgage. This typically results in a lower interest rate and reduced monthly payments.

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

Savings vary based on total debt, interest rates, and mortgage term. In this case, the customer saved approximately £726.56 per month by consolidating over £52,000 of debt.

Does remortgaging affect my credit score?

Initially, applying for a remortgage may result in a small credit dip. However, once high-interest debts are cleared and repayments become more manageable, your credit score may improve over time with consistent payments.

What documents are required for a remortgage application?

You typically need:

• Proof of income (e.g., payslips, tax returns)
• Proof of identity and address
• Current mortgage details
• Details of debts to be consolidated (balances, account numbers, etc.)

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 mortgage agreement or consult your mortgage advisor before making early repayments.

Ready to Regain Control of Your Finances?

If you’re feeling overwhelmed by high-interest debts and are looking for a smarter way to manage your monthly repayments, a remortgage to pay off debt could be the right solution. Our expert advisors can help you assess your options and guide you through the process.

Contact us today for a free, no-obligation consultation and see how much you could save.