Debt Consolidation Remortgage
A debt consolidation remortgage replaces unsecured debt - credit cards, personal loans, car finance - with secured mortgage borrowing, reducing monthly payments and simplifying finances into a single payment.
Lower monthly payments - but the full cost must be modelled
Consolidating £40,000 of unsecured debt at 15-20% APR into a mortgage at 4-5% reduces monthly payments substantially. But extending 5-year debt over a 20-year mortgage term significantly increases the total interest paid over the life of the debt. The FCA requires full cost disclosure. We model the full comparison - monthly saving versus total cost - before recommending consolidation.
Debt consolidation remortgage - every scenario handled
Credit Card Consolidation
High-interest credit card balances - particularly where introductory 0% periods have expired - are a common consolidation target. The interest rate difference between credit card debt and mortgage debt can be 10-15%, producing substantial monthly savings.
Personal Loan Consolidation
Personal loans with 3-5 years remaining are frequently consolidated into a remortgage. We model whether the lower interest rate over the remaining loan term outweighs the cost of extending the debt over the mortgage term.
Car Finance Consolidation
Car finance with a balloon payment or high APR can be consolidated into a remortgage. The car depreciates while the mortgage is a charge against a capital asset - modelling the full cost and asset positions is important before consolidating.
Complex Income Consolidation
Self-employed and complex income borrowers can access debt consolidation remortgages from specialist lenders who assess the real income picture rather than requiring payslips. The lender must be able to assess the remortgage affordability on the new combined debt.
Adverse Credit Consolidation
Borrowers with adverse credit who want to consolidate can access specialist adverse credit remortgage lenders. The rate will reflect the credit history but the consolidation may still produce a significant monthly saving.
Full Cost Modelling
Before recommending any consolidation remortgage, we model the monthly saving, the total cost over the mortgage term, and the break-even point. Some consolidations that produce monthly savings are uneconomic over the total term.
How it works
Share the full debt position
Tell us the debts to be consolidated, their balances, rates, and remaining terms. We model the monthly saving and total cost comparison before approaching any lender.
Affordability on the new combined loan
The new remortgage must pass the lender's affordability assessment including the increased loan amount. We identify which specialist lenders can advance the required amount on your income and property value.
Application and valuation
We manage the full remortgage application. The lender's valuation is typically free on standard remortgages. Consolidation remortgages with adverse credit require specialist lender valuation arrangements.
Completion and debt repayment
On completion of the remortgage, the cash released repays the consolidated debts. Credit card and loan accounts are closed. Monthly obligations reduce to the single mortgage payment.
Looking to consolidate debt into your mortgage?
Share the debts to be consolidated and your property details. We model the full cost comparison and return the best available remortgage deal - same working day response.
Frequently asked questions
Is debt consolidation remortgage a good idea?
It depends on the specific debts, rates, and remaining terms. It can produce significant monthly savings while increasing total interest paid over the extended term. We model both figures before recommending consolidation - the right answer is different for every case.
How much equity do I need to consolidate debt via remortgage?
The consolidated debt is added to the existing mortgage balance. The combined loan must stay within the lender's maximum LTV - typically 85-90% for consolidation remortgages. The equity in the property must be sufficient to absorb the additional borrowing.
Will debt consolidation hurt my credit score?
Closing credit card accounts after consolidation can temporarily reduce the credit score. The positive impact of reduced utilisation and simplified payments typically outweighs this over 6-12 months.
Can I consolidate debt if I have adverse credit?
Yes - from specialist adverse credit remortgage lenders. The rate will reflect the credit history, but consolidation remains possible where sufficient equity exists in the property.
What types of debt can be consolidated?
Credit cards, personal loans, car finance, and other unsecured debt. Student loans and HMRC debt are generally not consolidated via mortgage. Each lender has different policies on the types of debt they will accept for consolidation.