Customer Overview
A married couple in their late 50s, based in the UK, approached us seeking a debt consolidation remortgage. One applicant had recently taken a pension lump sum to clear unsecured debts, and both wanted to simplify their finances, reduce their monthly outgoings, and become 100% owners of their home.
The Challenge: High Monthly Payments and Multiple Charges on the Property
The couple’s primary concerns were:
- A high-interest mortgage with a specialist lender.
- An outstanding secured loan of £36,008 with monthly payments of £650.
- A Help to Buy equity loan that needed to be repaid.
- Multiple charges on the property, limiting lender options.
The secured loan alone was costing a significant amount over time. If left as it was, the estimated total repayment would have been £62,400 by February 2034. When compared over a longer mortgage term, the cost of consolidating this borrowing would total approximately £69,855.52, meaning £1.94 repaid for every £1 borrowed. Ultimately, a debt consolidation remortgage could reduce these repayments overall.
While consolidating debt into a mortgage can increase the total interest paid over the long term, the immediate pressure of high monthly payments was their main concern.
The Solution: Remortgage to Clear Debt and Secure Better Terms
After reviewing their circumstances, we arranged a remortgage to clear debt with a new lender who required full title on the property. This meant:
- Repaying the existing high-interest mortgage.
- Consolidating the £36,008 secured loan into the new mortgage.
- Raising additional funds to repay the Help to Buy loan.
- Ensuring the property had no other charges attached.
This approach allowed the couple to:
- Move to a more favourable interest rate.
- Reduce their overall monthly financial commitments.
- Become 100% owners of their home.
- Simplify their finances into one manageable monthly payment.
Importantly, all unsecured debts had already been repaid using a pension lump sum, meaning that once the remortgage completed, they would have only one commitment: their main residential mortgage. It is also significant that debt consolidation remortgage helped them reach this goal.
Understanding the Costs of a Debt Consolidation Mortgage
It’s important to understand that a debt consolidation mortgage can cost more over the full mortgage term because:
- The repayment period is longer.
- You are securing previously unsecured borrowing against your home.
- Interest accrues over a greater number of years.
In this case, consolidating the secured loan into the mortgage would cost approximately £7,455.52 more over the full term compared to keeping it separate — assuming the mortgage runs its full term and only minimum payments are made. Moreover, a debt consolidation remortgage strategy may still make repayments much more affordable in the immediate term.
However, the key short-term benefit was improved affordability. After factoring in their previous mortgage and secured loan payments versus the new mortgage payment, their net disposable income increased by approximately £257.08 per month during the remaining term of the original loan.
The Result: Greater Financial Stability and Flexibility
Following completion of the remortgage:
- All unsecured debts were cleared.
- The secured loan was repaid in full.
- The Help to Buy loan was redeemed.
- The couple became sole owners of their property.
- Monthly outgoings reduced, improving cash flow.
As they explained:
“Once everything is complete, we’ll only have one mortgage payment and no other debts. It puts us in a much stronger financial position.”
With no intention of taking on further credit and improved disposable income, they are now better positioned for long-term financial stability. This outcome was made possible with debt consolidation remortgage.
Is a Remortgage to Pay Off Debt Right for You?
If you’re wondering can you remortgage to consolidate debt, the answer depends on:
- Your available equity.
- Your income and affordability.
- Your credit profile.
- Your lender’s criteria regarding existing charges.
Using a remortgage calculator can help estimate new monthly payments, but professional advice is essential to understand the long-term cost implications. You may wish to consider whether debt consolidation remortgage is suitable for your needs.
Frequently Asked Questions
Speak to a Debt Consolidation Remortgage Specialist
If you’re struggling with high monthly payments or want to simplify your finances, a debt consolidation remortgage could help you reduce outgoings and regain control.
Contact our team today to explore your options and receive tailored advice based on your circumstances.
