Remortgage to Clear Debt: How One Self-Employed Couple Improved Cash Flow with Debt Consolidation

Customer Overview

A self-employed couple in their early 40s from the Midlands were juggling high-interest credit card debts totalling over £62,000. Business income varied month-to-month, making budgeting a challenge. With no significant savings and a recent home renovation draining their finances, they wanted to consolidate the credit debt into their property to create financial breathing space. In such situations, remortgage debt consolidation can be a strategic solution.

The Challenge: Juggling High-Interest Debt and Irregular Income

Despite keeping up with minimum payments, the couple’s unsecured credit debt had become unsustainable. With interest rates ranging from 32% to 36% across multiple cards from providers like MBNA, Virgin Money, Lloyds Bank, and Capital One, monthly outgoings sat near £1,900. Having already experienced a dip in income due to one partner’s temporary gap in employment during a house move and renovation, they were keen to avoid further financial strain. Credit score concerns and a lack of liquidity only emphasised the need to act sooner rather than later.

The Solution: Remortgage to Consolidate Debt

We proposed a debt consolidation remortgage, allowing the couple to leverage existing equity in their home to roll their £62,168 of credit card debt into their mortgage. By remortgaging, they secured a more manageable and lower monthly payment structure compared to the high-interest credit products.

This strategy allowed them to:

• Lower total monthly outgoings by approximately £1,090.87
• Improve disposable income and budgeting flexibility
• Reduce reliance on credit and begin building savings
• Protect and potentially rebuild their credit profile by eliminating high unsecured balances

While the remortgage extended the debt over the mortgage term — with estimated total repayment reaching £118,119 — the long-term cash flow improvement outweighed the cost for this couple seeking stability and future financial options, especially with a future inheritance expected.

Results Achieved: Improved Financial Stability and Long-Term Relief

By remortgaging to clear their debts, the couple realised immediate monthly savings of over £1,090. Their net disposable income jumped significantly, easing pressure on household bills and enabling a new habit of monthly savings, which was impossible before. Remortgaging for debt consolidation provided them with much-needed financial relief.

Testimonial:

“This gives us breathing space and a path forward. Before, we felt like we were constantly treading water with no room to catch up — now we finally have that room to breathe, and we get to focus on saving and our future.” – Self-employed homeowner, Midlands

With credit now under control and their situation stabilised, they plan to close most credit cards and keep one or two open to maintain a healthy credit profile — without relying on them for ongoing spending.

Frequently Asked Questions

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

Savings vary, but in this case study, monthly disposable income increased by around £1,090.87. By consolidating high-interest debts into a lower-interest mortgage, borrowers often significantly reduce monthly expenses, showing the potential of remortgage debt consolidation.

Can you remortgage to fund home improvements?

Yes, many homeowners choose to use a remortgage not only to consolidate debts but also to raise funds for home improvements, provided they have enough equity in their property.

Does remortgaging affect my credit score?

Initially, applying for a remortgage may cause a small dip, but consolidating high-interest, high-balance debts can improve your credit score over time by reducing unsecured credit usage and improving your credit utilisation ratio.

What documents are required for a remortgage application?

Documents typically include:

• Proof of income (e.g., payslips or self-assessment tax returns)
• Bank statements
• Current mortgage statement
• Credit commitments and expenditure details

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

Most fixed-rate mortgages come with early repayment charges (ERCs). Check your Key Facts Illustration (KFI) or consult your broker for specific terms to understand applicable penalties before repaying early.

Final Thoughts and Call to Action

Whether you’re self-employed or simply feeling overwhelmed by credit card debt, a remortgage to consolidate debt could provide the financial flexibility you need. This couple’s journey shows that it’s possible to turn a stressful, high-interest situation into a manageable, structured plan for recovery — and even savings. A strategic remortgage debt consolidation plan can truly be a life-changing decision.

If you’re wondering “Can you remortgage to consolidate debt?” — the answer is yes, and the benefits can be life-changing when structured correctly.

Ready to explore your options?

Get in touch today for a free, confidential consultation. Our team will help you determine the best route toward becoming debt-free and financially secure.