How a Debt Consolidation Remortgage Helped One Homeowner Regain Control of Their Finances

Customer Overview

A homeowner in their late 30s working in a public service role in the North West of England approached us with growing concerns about their financial future. Recently entered into a Debt Management Plan (DMP), they were feeling overwhelmed by high monthly payments and seeking a fresh financial start. Many clients look to options such as remortgage for debt consolidation when facing these challenges.

The Financial Challenge

This customer was dealing with monthly repayments totaling £872 across various debts:

• A secured loan of £13,119 incurring long-term interest
• An unsecured personal loan of £2,353 with high monthly repayments
• A DMP with StepChange carrying a monthly cost of £539 to cover £6,150 in outstanding debts

In total, debts came to £21,621.72. Despite best efforts to maintain repayments, their outgoings were exceeding their income due to the sheer volume of obligations. They had no savings available and limited options outside of debt consolidation remortgage solutions.

The Mortgage Consolidation Solution

We recommended a debt consolidation remortgage to streamline debts into a single, more manageable monthly payment. This solution involved adding the total debt amount to their existing mortgage and extending the repayment term. Key elements of the solution included:

• Remortgaging to cover £21,621.72 in outstanding debt
• Reducing all monthly repayments into one consolidated mortgage payment
• Increasing monthly disposable income by approximately £775.18
• Helping the customer move out of their DMP and start rebuilding their credit

It is important to note that while this solution significantly improved monthly affordability, it also comes with long-term interest implications. Over the full life of the mortgage, the total repayment for the consolidated debt would be approximately £54,270.52 — meaning an additional £28,284.52 in interest compared to their existing loans. Debt consolidation remortgage can help simplify finances, but clients must consider the total cost.

Why It Worked for This Customer

Despite these increased long-term costs, the customer understood the trade-offs and decided that financial stability and credit repair were their priorities. Having recently overcome a gambling problem and taken proactive steps to safeguard their future, they were determined to close this chapter and start building toward financial wellness. As a result, the debt consolidation remortgage solution provided vital support at a crucial time.

Results: Immediate Relief and a Brighter Financial Future

By consolidating debts into their mortgage, this homeowner achieved:

• £775+ extra disposable income each month
• Exit from a high-cost, reputation-damaging Debt Management Plan
• Simplified finances with one manageable monthly payment
• Improved cash flow to build savings and avoid reliance on credit in future

“I’ve put so many changes in place so that I never fall back into this position. Consolidating everything into my mortgage gives me a clean slate and means I can finally focus on moving forward.” — Homeowner from North West England

This case is a powerful example of how remortgaging to clear debt can be a life-changing step for the right individual when accompanied by the right advice. For some, debt consolidation remortgage may be the most practical route toward a stable financial outlook.

Frequently Asked Questions (FAQs)

Can I remortgage to consolidate debt?

Yes, you can consolidate various unsecured or secured debts into your mortgage. This can lower your monthly outgoings, but may increase the total interest paid over the mortgage term. For many, a remortgage focused on debt consolidation is a straightforward option.

How much can I save each month by consolidating debt?

Savings vary, but in this case, the homeowner saved approximately £775.18 per month by consolidating loans and exiting their DMP. Furthermore, debt consolidation remortgage can offer greater long-term financial flexibility.

Does remortgaging affect my credit score?

It can improve your credit score over time if it helps you pay off debts and manage repayments consistently. However, missing mortgage payments can have serious negative effects. Always weigh the benefits of remortgage for debt consolidation against the risks.

What documents are needed for a remortgage application?

You will typically need recent payslips, bank statements, a valid ID, your mortgage statement, and details of all debts you intend to consolidate. When applying for debt consolidation remortgage, preparing these documents in advance will help the process go smoothly.

Can I repay a fixed-rate mortgage early?

Yes, but early repayment charges may apply depending on your lender and mortgage terms. Always check your offer documents or speak with a mortgage advisor for guidance. Remortgaging with a debt consolidation focus may carry restrictions on early repayment.

Start Your Journey to Financial Freedom Today

If you’re struggling with multiple debts or a high monthly outlay, a debt consolidation mortgage might be the solution for you. Speak with one of our expert advisors to explore options tailored to your circumstances, including remortgage for debt consolidation if appropriate.

Contact us today for a free consultation and see how we can help you regain control of your finances.