Written by Sarah Mascot, Mortgage Advisor, Debt Consolidation Expert, The Mortgage Broker
Book a free appointment with Sarah, here.
If you are juggling credit cards, loans and an overdraft that never seems to shrink, it can feel like you are constantly firefighting.
You are not alone. Pepper Money’s Specialist Lending Study 2025-2026 found that households who have experienced adverse credit owe £5,100 on average (excluding mortgages and student loans), versus £4,200 for the average UK adult. Nearly one in three owe more than £5,000, and one in ten owe more than £15,000.
A debt consolidation remortgage can help in some situations. But it is not a magic fix. If you do it for the wrong reasons, or without a plan, you can make things worse.
Key Takeaways:
- A debt consolidation remortgage is where you increase your mortgage to clear other debts.
- You are moving debts from unsecured to secured. That means your home is on the line if you cannot keep up repayments.
- It can reduce monthly outgoings, but you could pay more interest overall if you spread short-term debt across a long mortgage term.
- There are alternatives, like a debt consolidation loan or a second charge mortgage, depending on your situation.
- Preparation matters. A clear debt list, a clean budget, and a credit file check make a big difference.
What is a debt consolidation remortgage?
A remortgage is when you switch your existing mortgage deal, either to a new lender or a new product with your current lender.
A remortgage for debt consolidation is when you borrow extra against your home and use that extra borrowing to pay off other debts like credit cards, personal loans or overdrafts.
In simple terms, you replace several payments with one larger mortgage payment.
Why do people remortgage for debt consolidation?
Most people look at debt consolidation mortgages because:
- Monthly payments feel out of control
- Interest on unsecured debt is high
- The cost of living has squeezed household budgets
- You want one payment and one date, not several
That last one is important. Simplicity helps, but only if you stop the debt building back up again.
Book a Free Debt Consolidation Remortgage AppointmentHow it works (step by step)
1) List every debt properly
Write down every balance, the interest rate, and the monthly payment. Include credit cards, loans, overdrafts and finance agreements.
2) Work out your equity
Equity is the gap between your property value and your outstanding mortgage. It is what makes borrowing extra possible.
3) Check early repayment charges
If you are still inside a fixed rate, you may pay an early repayment charge to leave. That can change the maths.
4) Check your credit file
Lenders will look at missed payments, defaults, CCJs and how you manage credit today. If credit is a concern, checking your credit file first helps you avoid surprises.
5) Choose the right route
This could be:
- A full remortgage (switch lender)
- A product transfer (stay with your current lender)
- An alternative route, such as a second charge mortgage
6) Apply and clear the debts
If accepted, your mortgage balance increases and the debts you are consolidating are cleared as part of the process.
Pros and cons (no fluff)
Potential benefits
- One monthly payment instead of several
- It may reduce monthly outgoings, especially if your unsecured debts are expensive
- Budgeting can feel simpler and more manageable
Real risks you must take seriously
- You are securing debts against your home
- You can pay more overall if you spread short-term debt over a long mortgage term
- You reduce your equity
- Fees can apply (early repayment charges, lender fees, valuation and legal costs)
A debt consolidation remortgage can be a sensible restructure for the right person. It can also be a costly mistake if it is used as a reset button with no change in spending behaviour.
Can you remortgage for debt consolidation with bad credit?
It can be possible.
Pepper Money’s research suggests:
- 30% of UK adults have experienced adverse credit at some point (around 16.6 million people)
- One in ten have missed a credit payment in the last 12 months (around 5.57 million)
What lenders usually care about is:
- What happened
- When it happened
- What has changed since
If you are exploring a remortgage for debt consolidation with bad credit, the lender choice and case presentation matter. This is where a broker can add real value, especially if your situation does not fit neat, automated scoring.
Remortgage vs second charge vs debt consolidation loan
These are the three common routes people compare.
Debt consolidation remortgage
- Replaces your current mortgage with a new one
- Often considered when your current deal is ending, or the overall refinance makes sense
Second charge mortgage (secured loan)
- You keep your current first mortgage and add a second loan secured on the property
- This can be relevant if you are on a strong existing mortgage rate but need to consolidate debts
Debt consolidation loan
- Usually shorter term than a mortgage
- Can be unsecured or secured depending on the product and your credit profile
None of these is “best”. The right option depends on affordability, total cost, credit position, and whether it genuinely breaks the debt cycle.
A “mortgage-ready” checklist
Before you speak to anyone, get this together:
- Full list of debts, balances, interest rates, and monthly payments
- Current mortgage balance and your deal end date
- Any early repayment charges
- Proof of income and recent bank statements
- Your credit file
- A realistic monthly budget that shows the new payment is affordable long term
Book a Free Debt Consolidation Remortgage Appointment
Shared ownership and debt consolidation
A shared ownership remortgage debt consolidation route can be possible, but it is often more complex. Fewer lenders support shared ownership remortgaging, and your housing association may need to be involved depending on the terms. The lender pool is smaller, so it is usually one to handle carefully.
Why speak to The Mortgage Broker?
Debt consolidation is one of those areas where online figures can look attractive, but the detail is where cases succeed or fail.
When you speak to us, you get:
- Clear explanations of the risks and trade-offs in plain English
- Access to specialist lenders when high street criteria does not fit
- Support for complex income (self-employed, limited company directors, variable pay)
- A proper affordability view based on your full monthly picture
- Transparent fees: no mortgage offer = no fee
- Digital speed when you need it, plus a human being to sense-check the decision
If you want to talk it through, get started or request a call back. You can also call 0800 0320 316.
Quick-fire FAQs
A mortgage application can leave a footprint, and closing debt accounts can change your score in the short term. What matters most is whether your overall commitments become manageable and you keep payments on time.
Not always. Some people consolidate only higher-interest debts. The key is that the overall plan reduces pressure and stays affordable.
It can, mainly because mortgage terms are longer. But longer terms can mean paying more interest overall, so you need to look at the total cost, not just the monthly number.
Yes. You are turning unsecured debts into secured borrowing. If you cannot keep up repayments, your home may be at risk.
Early repayment charges may apply. Sometimes people explore alternatives like a second charge mortgage, or they time the switch nearer to the deal end date.
List the debts, check your credit file, and build a realistic budget. Then speak to an adviser so you understand your options and the risks.
Important warnings
Your home may be repossessed if you do not keep up repayments on your mortgage.
Consolidating unsecured debts into a mortgage may reduce your monthly payments, but you could pay more interest overall if you repay over a longer period.
This guide is general information, not personal advice. Every case is different. If you are struggling with debt, consider also using free debt support services alongside speaking to a qualified mortgage adviser.
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0800 0320 316
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Author: Sarah Mascot, Mortgage Advisor, Debt Consolidation Expert
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