Written by Sarah Mascot, Mortgage Advisor, The Mortgage Broker.
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Depending on when you fixed your mortgage term, you may be able to take advantage of reducing mortgage rates to help ease the financial pressure. January is a long month, and can feel brutal financially. December spending catches up fast, credit card balances land, and suddenly your monthly outgoings look heavier than they did a few weeks ago.
If you are a homeowner, one option you may be able to explore is remortgaging for debt consolidation. This is one of the key drivers we see behind remortgages and right now is a good time to review this. This is an option that means moving some unsecured debts (like credit cards, loans, car finance, store cards) into your mortgage, so you have got one monthly payment and, in many cases, a lower rate than unsecured borrowing.
If your remortgage is up for review or approaching your product end date (fixed rate term) – then this is all the more reason to review your mortgage options today. Mortgage pricing has been easing, with major lenders cutting rates after the Bank of England reduced the base rate to 3.75% in December 2025.
A debt consolidation remortgage can lower your monthly outgoings, but it also turns unsecured debt into secured debt. That means your home is at risk if you don’t keep up repayments. Therefore, we will always weigh up the long term cost alongside any reduction in your monthly payment to ensure it is a financially sensible option.
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Why this matters in January (and why you’re not alone)
The facts are that many people feel this way after Christmas, and any remortgages that could have been done at the end of last year, are often put back to the new year. The data backs this up and shows what many people feel after Christmas: credit card borrowing has been rising sharply.
This doesn’t imply any failure or that you have done something wrong. It is very common with the cost of living, family costs and a few one-offs colliding at the same time that many people need an option to help get finances and monthly outgoings back to being manageable. What matters now is getting back in control with a plan that is financially sustainable.
It is really important to get independent mortgage advice when looking at your mortgage options, so that you can be sure to understand what the entire UK market can offer, and not just your current mortgage lender.
What is debt consolidation through remortgaging?
A debt consolidation remortgage is when you switch your mortgage deal (often to a new lender, sometimes with your existing lender) and borrow extra to repay other debts in one go.
Instead of multiple payments going out each month, The Mortgage Broker can look to help you:
- simplify your monthly bills
- reduce the total monthly outgoings
- stop expensive credit card interest
- build a clearer budget you can stick to
Depending on when you got your mortgage, it may just be that the rates today are less than your current rate, and even with a consolidation of some debts, you can improve your rate and therefore, your monthly payments.
Important: you’re spreading that debt over a mortgage term (often much longer). That can mean paying more overall, even if the monthly payment drops.
Why people choose this option
1) Lower monthly outgoings (cashflow relief)
Mortgage rates are usually lower than credit card rates, so moving balances can reduce the monthly cost. With mortgage rates reducing since your last mortgage rate review, this may be an immediate positive solution.
2) One payment, one date, less stress
Lots of people on forums say the hardest part is juggling due dates, minimum payments, and fluctuating interest. Consolidation can give you a cleaner structure and clarity over when you need to make a single payment.
3) A chance to “reset” the household budget
When you combine this with a realistic budget and a stop to new borrowing, you can get momentum back and rebuild your finance.
The big risks (read this before you do anything)
Even though you can relieve any pressure today, and enable you and your household to have more disposable cash, you need to be aware and consider the consequences of doing this.
- Your home is at risk if payments aren’t maintained.
- You could pay more overall by spreading short-term debts over 20–30 years.
- Early repayment charges (ERCs) may apply if you’re still in a fixed/tracker deal but this will of course be assessed in any mortgage review, alongside your options.
- Fees and costs (product fees, legal, valuation) can reduce the benefit.
- Negative equity risk: borrowing more can reduce your safety buffer if property prices dip.
- Behaviour risk: if you clear cards then run them back up again, you can end up worse off of course.
A good consolidation plan includes a simple rule the debts get cleared and the borrowing stops.
Your main debt consolidation mortgage options (not everyone needs a full remortgage)
In a remortgage review you should look at these options:
- Full remortgage with extra borrowing- Best when the overall saving (rate + structure) stacks up after fees and ERCs.
- Product transfer + further advance (same lender)- Often faster and simpler. Sometimes the cheapest overall once fees are considered.
- Second charge mortgage (secured loan)- Useful when your existing mortgage rate is very good (so you don’t want to disturb it), but you still need consolidation. Second charges are secured on your home too, so the same repossession risk applies and the costs are higher.
- Unsecured consolidation (personal loan / balance transfer)- Sometimes better if the debts are short-term and you can clear them quickly without turning them into secured borrowing, however, our aim is to remove the requirement to do this and avoid any unsecured debts.
If you are unsure which route fits, that’s exactly what a free remortgage review is for.
Speak with an advisor today!
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What lenders look at for debt consolidation remortgages
Every lender is different, but typically they’ll assess:
- Affordability (income, committed spending, dependants, ongoing credit commitments)
- Credit history (missed payments, defaults, arrangements, overall conduct)
- Loan to Value (LTV) (how much you’re borrowing vs property value)
- Debt details (balances, monthly payments, and what the borrowing is for)
- Property and mortgage details (current lender, current deal, remaining term)
A simple checklist before your remortgage review
Bring these and your review will be quicker and more accurate:
- your latest mortgage statement
- a list of debts (balance, monthly payment, interest rate, remaining term)
- last 3 months’ bank statements
- latest payslips (or latest accounts/tax docs if self-employed)
- proof of ID and address
- a realistic monthly budget (what you can truly afford)
If bad credit is part of the story, it helps to check your credit file first so there are no surprise. The Mortgage Broker have bad credit specialist and can help advise anyone with adverse credit or a poor credit file score. Millions of people have blemishes on their credit file, and it is very normal. This does not mean you don’t have any mortgage options. You can read more about bad credit mortgages here: Bad Credit Mortgages.
How the free remortgage review works (what you can expect)
With The Mortgage Broker you get:
- a clear, no-pressure review of your current mortgage and debts
- options across 130+ lenders and 25,000+ products (where criteria fits)
- plain-English pros/cons and long-term cost comparisons
- a plan that focuses on affordability and sustainability, not just “getting it done”
Fee promise: No mortgage offer = no fee. We only charge a transparent broker fee after securing a formal mortgage offer.
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FAQs: Remortgage for debt consolidation
Debt consolidation through remortgaging is when you switch mortgage deal and borrow extra to repay other debts (like credit cards and loans). The goal is one monthly payment, often at a lower rate than unsecured borrowing.
It can. A mortgage rate is usually lower than a credit card rate, so consolidating can reduce monthly outgoings. But because a mortgage term is longer, you could pay more overall unless the plan is structured carefully.
Look at early repayment charges, fees, the total cost over the full term, and whether you’ll actually stop new borrowing. Also remember you’re turning unsecured debt into secured debt.
Sometimes, yes. It depends on what’s on your credit file, how recent it is, and affordability. A specialist-lender route may be needed, and rates can be higher than “high street” deals.
Monthly payments can drop because the interest rate is often lower and the term is longer. But that longer term can increase the total interest paid overall.
Yes. The biggest risk is that your debts become secured on your home. If you don’t keep up repayments, your lender can take action to repossess.
A remortgage usually involves a credit search and a new credit account, which can cause a small short-term dip. Over time, consistent on-time payments can help.
In most cases, both owners must consent to a remortgage. If someone can’t be contacted, you’ll normally need legal advice to resolve ownership and authority before any lender can proceed.
Typically: proof of income, bank statements, ID/address, existing mortgage statement, and details of the debts being consolidated.
Often yes. These can include product fees, valuation fees, legal fees, and potential early repayment charges. The key is whether the overall savings outweigh the total costs.
A typical timeframe is around 4–8 weeks, depending on the lender, valuation, legal work, and how quickly documents are provided.
Sometimes, but it’s specialist and depends on the equity release product, your age, and lender criteria. It needs careful review of terms and costs.
LTV is the mortgage amount compared to the property value. A lower LTV usually means better rates and more lender choice. A higher LTV can reduce options.
Broadly similar to the rest of the UK, but the legal process and conveyancing are handled under Scottish property law, so you’ll want a broker and solicitor who deal with Scottish transactions regularly.
Final word: this can work, but only if it’s done properly
If you’ve overspent at Christmas or you are simply trying to bring monthly outgoings down, a debt consolidation remortgage can be a good option for some homeowners. The right answer depends on the full picture: your mortgage deal, your debts, your credit profile, and your budget.
Your home may be repossessed if you do not keep up repayments on your mortgage.
If you take additional borrowing (including a second charge), it will be secured against your home.
Speak with an advisor today!
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