Remortgage to Consolidate Debt: How One Professional Found Financial Stability

Mounting monthly commitments and increasing mortgage rates can be a harsh reality for many UK homeowners. For one single professional in her 40s, living in the Midlands, financial pressure was mounting fast. Facing rising costs and little to no disposable income, she explored a remortgage to consolidate debt—a move that brought her peace of mind and drastically improved monthly cash flow.

Customer Background

The customer, a single homeowner working in an administrative role, had accumulated a variety of financial commitments over the years. Credit cards used for home improvements and unexpected expenses, combined with two significant unsecured loans, left her with total debts exceeding £19,500—now considering remortgage debt consolidation to address it. Already on a tight budget, the increase in her mortgage interest rate from 1.59% added further pressure.

The Financial Challenge

Monthly outgoings were higher than her monthly income, leaving the customer with no disposable income. She managed to cover all her obligations but was juggling payments and was at risk of financial default if nothing changed.

• Total debts: £19,539.00
• Monthly debt repayments: £807
• High interest rates on credit cards—some exceeding 30%
• Rising mortgage payments due to rate increase

Her financial stress was increasing, and she feared missing payments in the near future. Despite making every effort to keep all accounts up-to-date, the unsustainable pressure called for a long-term solution—something like remortgage debt consolidation.

The Solution: A Debt Consolidation Remortgage

After detailed consultation, she opted for a debt consolidation remortgage. This allowed her to roll her high-interest debt into her mortgage, restructuring her payments into a single, manageable monthly figure. The plan was to consolidate:

• Credit card balances with interest rates up to 35%
• Two high monthly repayment personal loans

Not all debts were consolidated. Following advice, she chose to continue paying off a few smaller balances from her own income, selectively consolidating only those that offered the most substantial monthly relief and long-term value.

Key Considerations

• Consolidation would stretch unsecured debt over a longer mortgage term, increasing total interest paid.
• The secured mortgage debt now includes amounts that were previously unsecured, presenting higher risk, especially after the remortgage debt consolidation.
• She was fully informed of the long-term cost trade-off; £19,539 consolidated at an expected total repayment cost of £26,377.65.

Results Achieved

Despite increasing the long-term cost, this financial restructuring offered immediate monthly relief and restored financial stability, thanks to the remortgage debt consolidation strategy.

• Monthly disposable income increased by approximately £536.73
• Credit stress alleviated significantly
• All high-interest debts cleared under improved mortgage terms
• Plan in place to close all credit cards and avoid incurring new debt

“I’m finally able to sleep at night. Every month used to feel like a race to pay everything on time with nothing left over. Now, I can breathe again,” she shared.

Frequently Asked Questions

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

Savings vary, but in this case, the customer saved approximately £536.73 in monthly disposable income by consolidating £19,539 of debt through a remortgage.

Can you remortgage to fund home improvements?

Yes, remortgaging can be used to release equity for home improvements. This customer’s original debts stemmed from such expenses, although her remortgage mainly served debt consolidation purposes.

Does remortgaging affect my credit score?

A remortgage application triggers a credit check, which may cause a small temporary dip in your score. However, reducing financial strain and avoiding late payments can positively impact your score over time.

What documents are required for a remortgage application?

Typically, you’ll need proof of income, a credit report, details of existing debts, home value, and identification documents. Lenders may request further documentation based on your circumstances.

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

Early repayment charges may apply during a fixed-rate period. It’s essential to check your lender’s terms or have your advisor guide you.

Ready to Consolidate Debt and Reclaim Financial Control?

If you’re feeling the pressure of mounting credit card debt and rising mortgage costs, you might benefit from a debt consolidation remortgage like this customer. Our experts can walk you through your options transparently and responsibly.

Take control of your financial future today—get free remortgage advice from our specialist team.