Remortgage to Clear Debt: How One Couple Saved £153 Monthly by Consolidating a Secured Loan

Anonymous Client Overview

A couple in their early 40s, employed in white-collar professions and residing in the South East of England, faced rising monthly expenses as their fixed-rate mortgage was set to expire. They had previously taken out a secured loan to finance a home extension and were now exploring options to improve their monthly cash flow through methods such as a NatWest debt consolidation remortgage.

The Challenge: Rising Mortgage Payments and an Existing Secured Loan

With their fixed-rate mortgage due to revert to a higher rate of 4.14% with Accord, their monthly payments were set to rise significantly—from £1,564 to £1,996 when including a separate secured loan repayment of £432 per month.

This jump of over £400 per month was unaffordable for the couple, who had limited disposable income. Their secured loan of £37,416 was used to fund a wrap-around extension on their home, but they now needed to reduce their outgoings without resorting to further borrowing. Considering a remortgage option with NatWest could incorporate debt consolidation and provide relief.

The Solution: A Strategic Debt Consolidation Remortgage

We recommended consolidating the secured loan into a new mortgage through NatWest at a competitive interest rate of 3.83%. While slightly higher than their initial 2.03% fixed rate, this was significantly lower than the 4.14% they would otherwise face with Accord, and lower than what they were paying on the secured loan with Pepper (UK).

By combining the existing mortgage and secured loan into one remortgage, the new monthly repayment was brought down to £1,843—a reduction of £153 per month compared to the projected new payments. Opting for NatWest through this consolidation method offered a distinct financial advantage.

Key Benefits of the New Remortgage:

• Lower Monthly Payment: Reduced total repayments by £153 each month.
• Interest Rate Reduction: Secured a lower rate of 3.83% vs 4.14% if they stayed with Accord.
• Cash Flow Stability: Gained greater disposable income to handle other monthly expenses.

Financial Outcome and Long-Term Considerations

While the lower monthly payment provided immediate relief, the couple was informed about the long-term implications. Consolidating the £37,416 secured loan into their mortgage meant paying back approximately £53,130.72 over the term—equating to £1.42 for every £1 borrowed. This was a calculated decision as part of the NatWest debt consolidation remortgage strategy.

Although the cost of debt was higher over time due to the extended loan term, the solution helped avoid the sharp monthly increase, offering vital short-term affordability.

Client Testimonial

“This new mortgage is going to cost us about £60 more a month compared to the current payment, but when our fixed rate ends in February, we’re actually saving around £153 every month. That financial breathing room makes a huge difference.”

Frequently Asked Questions (FAQs)

Can you remortgage to consolidate debt?

Yes. Remortgaging allows you to combine existing debts, including secured loans, into your mortgage. With solutions like NatWest debt consolidation remortgage, this can help reduce overall monthly repayments by spreading costs over a longer term.

How much can I save monthly by consolidating credit or secured loan debt into a mortgage?

Savings vary depending on the existing interest rates and how much debt is being consolidated. In this case, the client saved £153 per month after consolidating a secured loan into their mortgage through NatWest.

Does remortgaging affect my credit score?

Initially, a remortgage application may result in a small dip in your credit score due to hard credit checks. However, consolidating debt can improve your score over time by reducing your overall monthly obligations and risk of missed payments.

What documents are required for a remortgage?

• Proof of income (payslips or tax returns)
• Current mortgage statements
• Credit report
• Identification (passport or driver’s license)
• Details of debts being consolidated

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

Most fixed-rate mortgages come with Early Repayment Charges (ERCs). It’s essential to check your current mortgage terms or speak with your lender for accurate figures.

Take the Next Step Toward Financial Freedom

If you’re struggling with high monthly debt repayments and want to explore whether a debt consolidation mortgage is right for you, reach out to our trusted mortgage advisers today. We’ll provide transparent, expert guidance to help you secure the right solution for your circumstances.

Start your journey toward financial peace of mind — contact us now for a free no-obligation consultation.