Remortgage to Clear Debt and Reduce Term: A Flexible Solution for Professionals with Variable Income

Customer Overview

A healthcare professional in her early 40s from South East England sought a more cost-effective mortgage solution after previously securing a home loan during a period of higher interest rates. Her income primarily came from a blend of permanent employment and substantial locum work, which posed unique lending challenges due to how different banks categorise freelance income. This remortgage story reflects a growing trend of people like her seeking tailored solutions for a mixed income structure.

Initial Challenges

The customer had taken out her mortgage a few years ago when rates were considerably higher. Though she was interested in securing a better deal, she was still bound by an early repayment charge on her current Halifax mortgage, which made switching less straightforward. Her main goals were:

• Refinance to take advantage of better mortgage rates
• Shorten the mortgage term to reduce overall interest repayment
• Find a lender that would accept her mixed income sources, especially her locum work from the past 18 months

Unfortunately, most mainstream lenders treat locum income as self-employment, requiring two full years of self-assessments — which she didn’t yet have — thereby significantly limiting her options.

The Recommended Remortgage Solution

After a thorough assessment of the client’s financial situation, Deal Direct recommended switching to a new lender, despite an early repayment charge, to secure significant long-term savings and better mortgage flexibility. The chosen lender was Skipton Building Society, which stood out for several reasons:

• Flexible Income Assessment: Skipton treated the client’s locum work as employed income, accepting the average of 3 months’ invoices rather than viewing her as self-employed, perfectly accommodating her mixed income profile.
• Competitive Rate: A 2-year fixed rate of 4.05%, offering both short-term security and flexibility for reviewing options once this period ends.
• Loan Amount: £485,000 over a 24-year term, shortened from her current 26 years and 6 months.
• Monthly Payments: Targeted payments of around £2,600–£2,700, in line with her affordability goals.

Why Skipton Was Chosen

A range of well-known lenders such as Nationwide, HSBC, and Barclays were ruled out due to strict self-employed income criteria. Others, like Halifax — her current lender — were unavailable due to her fixed-rate tie-in period. The early exit fee of £9,512 was considered worthwhile in light of long-term savings. Importantly, Skipton was able to offer her a remortgage deal that suited her mixed income scenario.

Skipton’s product also included several customer-friendly features:

• 10% overpayment flexibility per year
• No fees for valuation and legal services
• Portability — the mortgage can move with her if she relocates

Results and Benefits

Switching to Skipton resulted in:

• A reduced mortgage term, saving thousands in interest
• Monthly repayments aligned with budget expectations: £2,640.48/month initially
• Empowered plans for potential remortgaging in two years to capitalize on further interest rate reductions

“It was a big help finding a lender who actually understands my type of income. Skipton’s flexibility made everything possible — I couldn’t have done this without Deal Direct’s guidance.”

Frequently Asked Questions

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

While this case was focused on rate reduction and term shortening, many customers who consolidate unsecured debt into their mortgage often save hundreds per month by benefiting from lower interest rates and spreading repayments over a longer term. Use a remortgage calculator to estimate your savings.

Can you remortgage to fund home improvements?

Yes, remortgaging can release equity for home improvements. It depends on the property’s value and your affordability — speak with an adviser for personalized options.

Does remortgaging affect my credit score?

Remortgaging may involve a credit check, which could cause a minor, temporary dip in your score. However, managing your new mortgage well can boost your credit over time.

What documents are required for a remortgage application?

Typically, you’ll need proof of income (e.g., payslips, invoices, or SA302s), recent bank statements, ID, and documents related to your existing mortgage. Talk to a broker to ensure you have everything needed.

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

Most fixed-rate mortgages come with an Early Repayment Charge (ERC) during the fixed period. In this case, the customer accepted an ERC of £9,512 to move to a more suitable lender. Always assess whether the long-term savings outweigh the cost of the ERC.

Take Control of Your Mortgage Today

If you’re on a higher fixed rate, have mixed income streams, or want to reduce your mortgage term, we can help. Our trusted advisers work with lenders across the market to find personalised, flexible solutions based on your goals. Whether you’re looking to remortgage to clear debt, reduce your term, or improve your rate — we’re here to help.

Get started today — call us now or request a callback for your free, no-obligation consultation.