Using Your Remortgage To Consolidate Debts

March 4, 2024

Using Your Remortgage To Consolidate Debt

What Is A Debt Consolidation Mortgage?

A debt consolidation mortgage is a way of consolidating/combing your current debts into one (your mortgage). In many cases this makes managing your money a lot easier.

In other words, your mortgage will become a single loan rather than having multiple debts such as credit cards, loans, and overdrafts.

Can I Remortgage To Pay Off Debt?

It is possible to remortgage for debt consolidation, if you’re home has sufficient equity in your property to pay off your debts and you meet the eligibility requirements set out by your lender (which can be either your current lender or a different one).

How Do I Remortgage To Pay Off Debt?

Remortgaging lets you use your home’s equity to increase your mortgage loan amount and release the extra funds needed. You can then use this money to pay off debts like credit cards and car loans.

It may also help you reduce your monthly outgoings by saving you money, especially if you have high interest rates on your debts.

What Debts Can I Consolidation Into My Mortgage?

As a general rule, most types of unsecured debt can be consolidated into your existing mortgage, these include:

  • Loans
  • Credit cards
  • Hire purchase agreements
  • Store cards
  • Overdrafts
  • Student finance

Amongst other types of unsecured debt.

What Are The Risks Involved With Remortgaging To Pay Off Debt?

  • You’ll be paying your debts off for a longer period of time. Whilst you are reducing your monthly outgoings, if you increase the term of your mortgage loan, this may result in paying more in interest over a pro-longed period of time. 
  • Your home may be at risk, if you do not keep up to date with your repayments. Since you are securing debt against your home it could be repossessed if you do not keep up with the mortgage repayments. A debt consolidation remortgage is usually spread over a longer term than a personal loan therefore the total amount of interest you pay over the length of the new mortgage term will likely be more. It’ll be a condition of your mortgage offer that your agreed debts are repaid, typically by you, following your mortgage completion.
  • More fees to pay.  Since you are remortgaging, you may incur charges such as legal fees, product fees and early repayment charges.

Contact An Expert For Help!

Regardless of whether you’d like to find out more about your remortgage options, your affordability, or the wide range of services we can provide here at UKMC, don’t hesitate to get in touch.

You can either give our friendly remortgage team a call today on 01925 573328, request a call back at a more convenient date and time using our online contact form, or simply book your own appointment here  or even a face-to-face appointment in one of our offices!

UK Mortgage Centre is a trading style of Refresh Mortgage Network Limited. Refresh Mortgage Network Limited is authorised and regulated by the Financial Conduct Authority. FRN – 826982. Registered in England & Wales: 11614569. As a mortgage is secured against your home, it could be repossessed if you do not keep up the mortgage repayments. The Financial Conduct Authority does not regulate some forms of buy-to-let mortgages. The Financial Conduct Authority does not regulate will writing and taxation and trust advice.