How a Debt Consolidation Remortgage Freed Up Over £1,400 in Monthly Disposable Income

Customer Overview

A professional couple in their 40s from the South of England, both earning good incomes, were facing mounting monthly expenses and financial pressure due to high-interest credit card debt. Despite their stable employment, they were unable to build up savings, as most of their disposable income was being spent on unforeseen costs and debt repayments stemming from piling financial commitments.

The Financial Challenges

The couple’s financial strain stemmed from several key factors:

• A significant £950 monthly increase in mortgage payments after their low fixed-rate deal ended in 2023.
• High-interest debts accrued on three main credit cards totaling £30,206, due to increased living costs and emergency family expenses (including funeral costs).
• A lack of available savings and no immediate ability to reduce spending through cancelling lifestyle expenses.
• Each month, their small remaining surplus would be consumed by unexpected bills, preventing them from building an emergency fund or reducing debt effectively.

The Mortgage-Based Debt Consolidation Solution

To relieve financial pressure, the couple chose to remortgage their home and consolidate a portion of their debt—specifically, three high-interest-rate credit cards using a thorough debt consolidation remortgage strategy:

1. Virgin Money: £14,239 at 28% APR
2. Halifax: £4,229 at 24% APR
3. MBNA: £11,738 at 30% APR

These credit cards had total monthly repayments of £943 and were projected to cost over £50,520 to repay over their lifetimes.

By consolidating this £30,206 into their mortgage, they were able to lower their monthly outgoings significantly—freeing up £1,440.77 per month in disposable income despite the long-term repayment rising to approximately £58,902 due to interest over the mortgage term.

Results and Benefits Achieved

• Disposable Income Boost: An increase of over £1,440 each month, offering more room for saving and reducing additional debts.
• Simplified Payments: Three high-interest debts replaced by a single, manageable mortgage payment.
• Reduced Financial Stress: No missed payments to date and a renewed ability to plan ahead for unexpected bills.
• Strategic Repayment Plan: Remaining debts will now be the focus, funded by their bonus income expected in April/May 2026.
• Interest Rate Reduction: Improved mortgage rate as part of the remortgage deal adds further savings over time.

Client Testimonial

“We just couldn’t keep up with everything—monthly bills, the mortgage, and our cards. This remortgage has made a massive difference. We finally feel like we can breathe again and start saving for the future.” — Anonymous Client

Frequently Asked Questions

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

In this case, the clients saved approximately £1,440.77 per month by consolidating £30,206 of credit card debt into their mortgage during their debt consolidation remortgage process, significantly easing their monthly financial burden.

Can I remortgage to fund debt payoff and create savings?

Indeed, through a debt consolidation remortgage you can lower your outgoings and may free up resources to start building a savings pot, as seen in this example.

Does remortgaging affect my credit score?

Remortgaging itself may lead to a short-term dip due to credit checks, but consolidating debt and making reliable payments can improve your score over time.

What documents are required for a remortgage application?

This typically includes proof of income (payslips, tax returns), ID, current mortgage details, recent bank statements, and a full breakdown of existing debts.

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

Many fixed-rate mortgages include early repayment charges (ERCs), but this depends on your lender and mortgage terms. It’s important to check your mortgage offer for specifics.

Conclusion

Debt consolidation through a mortgage remortgage can be an effective way to regain financial control, especially for homeowners struggling under the weight of high-interest debts. While it may increase the total interest paid over time, the immediate benefits of increased financial breathing room, simplified repayments, and reduced stress are substantial. For individuals in similar positions, this type of solution offers a fresh start.

Take Control of Your Finances Today

Explore your options with a debt consolidation remortgage. Use our remortgage calculator to see how much you could save, or get in touch with one of our specialists for a no-obligation consultation.