Remortgage for Debt Consolidation
If you’re juggling credit cards, loans, or overdrafts, the idea of rolling everything into one lower monthly payment can feel like a lifeline. A debt consolidation remortgage does exactly that, it allows you to replace high-interest debts with one repayment, secured against your home.
But while this approach can reduce monthly financial pressure, it isn’t right for everyone.
Let’s explore how it works, the pros and cons, and what you should think about before making the move.
Quick Takeaways:
Rolling debts into your mortgage can ease pressure but comes with risks.
Lower interest rate doesn’t always mean paying less overall.
Your home is at risk if you can’t/ don't repay.
Always explore alternatives before making a decision.
Friendly, expert mortgage advice backed by our happy clients.
How Does a Debt Consolidation Remortgage Work?
When you remortgage, you effectively take out a new mortgage deal. With debt consolidation, you borrow a little extra on top of your existing mortgage balance to pay off unsecured debts like:
Credit cards
Personal loans
Overdrafts
Store cards
The idea is that by moving these debts into your mortgage, you’ll benefit from:
Lower interest rates compared to credit cards or loans
One fixed monthly payment instead of many
More predictable household budgeting
The Benefits of a Debt Consolidation Mortgage
1. Lower interest rates:
Mortgage rates are usually far lower than credit card rates, so you could save money on interest.
2. Simplified payments:
One repayment instead of several can ease stress.
3. Breathing space:
Lower monthly outgoings can give you space to get back on track financially.
Monthly Mortgage Payment Calculator
Keen to see what your new monthly mortgage payment might look like? Try our Mortgage Repayment Calculator:
The Risks of a Debt Consolidation Mortgage
Securing debts against your home: Unsecured debts (like credit cards) become 'secured'. If you don’t keep up with repayments, your home could be at risk of repossession.
Longer repayment period: Spreading debts over 20–25 years may mean you pay more in the long run, even if the interest rate is lower.
Potential fees: You may face early repayment charges, arrangement fees, or higher rates depending on your circumstances.
Alternatives to Consider
Before committing to a debt consolidation remortgage, you might also explore:
Product transfer with your existing lender: Sometimes you can raise funds without moving lender, avoiding big fees.
Personal loan: Keeps the debt separate from your home.
Debt management plans: If debt is unmanageable, a structured plan with a debt charity might be safer.
When Can a Debt Consolidation Remortgage Be a Good Idea?
It may be worth exploring if:
Your unsecured debts are high-interest and you’re struggling with monthly payments.
You have equity in your property to release.
You’ve got a steady income and a plan to avoid building up new debts.
It’s less likely to be suitable if:
You’re close to clearing your unsecured debts already.
You’d struggle with mortgage repayments if rates rise.
You’re at risk of borrowing more once cards are cleared.
Need a Hand?
This decision shouldn’t be made lightly. At Need Financial Planning, we’ll talk you through your options, explain the risks clearly, and help you work out if it’s the right step for you.
Ready to explore your options?
Prefer to email first? No problem!
Submit your enquiry here →
Need a Hand?
This decision shouldn’t be made lightly. At Need Financial Planning, we’ll talk you through your options, explain the risks clearly, and help you work out if it’s the right step for you.
Ready to get started?
Prefer to email first? No problem!
Submit your enquiry here →
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THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
IMPORTANT: With investments, your capital is at risk. Pensions and investments can go down in value as well as up, so you could get back less than you invest.
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