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Remortgage for debt consolidation
A remortgage for debt consolidation is when you replace your current mortgage to release equity and clear unsecured debts (like credit cards and loans), so you move to one monthly payment. This is for homeowners with equity who want to reduce monthly outgoings or simplify repayments. It is not a debt consolidation loan and it is not for buying a property with debts.
See the wider guide of debt consolidation options.
What Is a Debt Consolidation Remortgage?
A remortgage (also known as refinancing) is the process of switching your existing mortgage, either with your current lender, or with a different one across our panel of providers that cover thousands of different scenarios and credit ratings. A debt consolidation remortgage is when you do this to refinance and release equity in your home for the purpose of clearing some debts.
You pay off your current mortgage with the new mortgage, and your home continues to be used as security for the borrowing.
People choose to refinance for various reasons, including:
- To change the type of mortgage you have: For example, to switch from a variable to a fixed term mortgage.
- To obtain a better mortgage deal: Such as improved terms, payments, or interest rate
- To borrow more: You can borrow more money, using your home as security, and use those additional funds as you need to, including for the purpose of consolidating some debts.
Do I Qualify for a Debt Consolidation Remortgage?
Get a free debt consolidation remortgage review by simply speaking to one of our team to get a better idea of what your options are.
1. Speak to an adviser
Tell us your goals and needs
2. Understand your position
We can explain your options
3. Get any further advice
Decide how you want tomove forward
What Type of Debt Qualifies for a Debt Consolidation Remortgage?
Credit Card Debt
Remortgaging can help alleviate credit card debt by releasing equity from your home, which can then be used to clear the outstanding balance. This process involves converting unsecured debt into secured debt.
Unsecured Loans
Unsecured personal loans, such as those taken for home improvements or car purchases, can often be consolidated into a remortgage. By combining these loans into your mortgage, you may reduce your overall monthly repayments and simplify your finances by having a single payment instead of multiple lenders to manage
Overdrafts
Bank overdrafts, while typically smaller amounts, can carry high-interest rates. Including them in a consolidation remortgage can help you eliminate these expensive charges, turning short-term, high-interest debt into a manageable long-term mortgage repayment.
Student Loans
Whether or not student loans can be included depends on the type and terms of the loan. Some private student loans may be eligible for consolidation into a remortgage, while government-backed student loans often cannot. It’s important to check with your lender and understand the impact on repayment terms before including student loans in a consolidation strategy.
For any concerns around Klarna or other Buy Now Pay Later Cards, you can read more in our blog around how these affect a mortgage.
How Does Debt Consolidation Through Remortgaging Work?
Remortgaging for debt consolidation follows a structured process. Each stage is designed to assess your eligibility, confirm affordability, and ensure the new mortgage meets your needs.
Step 1: Property valuation and equity check
Your lender will assess the current value of your property. This may involve a desktop valuation or a physical inspection. They will then review your outstanding mortgage balance to calculate how much equity you hold. Equity is the difference between your property’s value and the amount remaining on your mortgage. The level of equity available will determine how much additional borrowing may be possible.
Step 2: Affordability and credit assessment
The lender will assess your income, expenditure, credit history and existing debts. This is to confirm that you can comfortably afford the new monthly repayments. Credit checks will usually be carried out as part of the application process. Your debt to income ratio and overall financial stability will play an important role in the decision.
Step 3: New mortgage issued
If your application is approved, your new mortgage offer will be issued. This document outlines the interest rate, term, monthly repayments, and any associated fees. You will use the new mortgage to repay your existing mortgage balance. Any agreed additional borrowing will be released at this stage.
Step 4: Existing debts repaid
Once the remortgage completes, the funds released can be used to clear the debts included in the consolidation. You will then have one mortgage repayment each month instead of multiple unsecured debt payments. It is important to remember that these debts are now secured against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
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Is a Remortgaging To Pay Off Debt The Right Move for You?
A remortgage for debt consolidation can help reduce or clear existing debts. The process should be considered carefully, as it depends on your circumstances. Our mortgage advisors will go through the following points with you:
Do you have enough equity in your home?
To be eligible for a remortgage, you need sufficient equity in your property. Equity is the difference between your property’s value and your outstanding mortgage balance.
What debts are you planning to consolidate?
Using a mortgage to repay short-term borrowing may not always be suitable. A mortgage is a long-term commitment, so you could pay more interest overall compared to keeping debts on shorter terms. You should explore alternative options.
Have you considered alternative options?
A remortgage is a secured debt against your home. There are other secured loan options available, and unsecured debts, however these should be approached with careful planning and caution. These could include transferring credit card balances to a lower interest deal or applying for a debt consolidation loan.
It is important to remember that your home may be repossessed if you do not keep up repayments on your mortgage.
Benefits and Risks of Consolidating Debt Into Your Mortgage
Consolidating debt into your mortgage can offer practical advantages, but it also carries important risks. Understanding both sides is essential before making a decision.
Potential Benefits
- One monthly payment: Instead of managing several repayments to different types of borrowing, you combine them into one single mortgage payment each month.
- Possible lower monthly outgoings: Depending on your mortgage position, you may get a better rate, or being able to spread repayments over a longer mortgage term, meaning your monthly payments may reduce. This can ease short term financial pressure, depending on your interest rate and term.
- Simplified budgeting: Having one fixed payment can make it easier to plan your monthly finance as well as being able to also reduce the risk of missed payments across multiple accounts.
Key Risks
- Securing unsecured debt against your home: Credit cards and personal loans are usually unsecured. When added to your mortgage, they become secured against your property. This increases the risk to your home if repayments are not maintained.
- Paying more interest over the full mortgage term: Mortgages are long-term commitments. Spreading short-term debts over many years can mean paying more interest overall, even if monthly payments fall.
- Impact on credit score during application: Applying for a remortgage involves credit checks. This can cause a temporary reduction in your credit score.
Can I Remortgage for Debt Consolidation With Bad Credit?
If you have bad credit or worried about your credit file score please don’t worry. Pepper Money (a specialist mortgage lender on our panel) have done a 2026 study that revealed over 9 million people have had bad credit or missed payments within the last 3 years.
Remortgaging may be more difficult, but there absolutely are possible available solutions, and we can search across 130+ lenders to assess who can help your scenario. Furthermore, if you remain with your current lender and we assess options there, you may not even be required to provide your credit file. Many lenders do require a minimum credit score rating in order to approve you for a remortgage, and that criteria varies from lender to lender.
We can assess your credit score and borrowing position and approach lenders that would be willing to consider your remortgage application. We can assess all the options and search without affecting your credit score further and provide you with clarity. You may pay more and end up with higher interest rates and fees. Read more about remortggaing with bad credit.
Working with a mortgage broker will help you to find the right lender for your circumstances and improve your chances of getting approved and obtaining favourable rates.
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Free RevewCan I Remortgage for Debt Consolidation With Bad Credit?
If you have bad credit or worried about your credit file score please don’t worry. Pepper Money (a specialist mortgage lender on our panel) have done a 2026 study that revealed over 9 million people have had bad credit or missed payments within the last 3 years.
Remortgaging may be more difficult, but there absolutely are possible available solutions, and we can search across 130+ lenders to assess who can help your scenario. Furthermore, if you remain with your current lender and we assess options there, you may not even be required to provide your credit file. Many lenders do require a minimum credit score rating in order to approve you for a remortgage, and that criteria varies from lender to lender.
We can assess your credit score and borrowing position and approach lenders that would be willing to consider your remortgage application. We can assess all the options and search without affecting your credit score further and provide you with clarity. You may pay more and end up with higher interest rates and fees. Read more about remortggaing with bad credit.
Working with a mortgage broker will help you to find the right lender for your circumstances and improve your chances of getting approved and obtaining favourable rates.
How Much Can I Borrow with a Debt Consolidation Remortgage?
In order to remortgage, you must have equity in your home, which in turn will result in how much you can potentially borrow. This is worked out as the difference between the value of your home and the balance owing on your current mortgage.
With good credit, there are options available to borrow up to 90% to the value of your home. This is know as the loan-to-value (LTV). If you have credit issues, then specialist lenders across our panel will lend up to 80%, sometimes 85%. All lender options come down to your credit file, affordability and equity within your property meeting their criteria. The more equity you have in your property, the better rates you will typically be offered and the more you may be able to borrow to consolidate your debts.
A 70% LTV or under is generally thought of as low and typically a lower LTV ratio will mean more competitive rates.
What does this mean?
Example: Getting a 90% LTV Remortgage for Debt Consolidation
- Your property is currently valued at £200,000
- You are offered a 90% LTV remortgage
- The maximum total borrowing allowed would be £180,000
- Your current mortgage is £100,000
- You would therefore be able to access up to £80,000 to consolidate.
Bad Credit Example: Getting a 80% LTV Debt Consolidation Remortgage
- Your property is currently valued at £180,000
- You are offered an 80% LTV remortgage
- The maximum total borrowing allowed would be £144,000
- Your current mortgage is £125,000
- You would be able to access up to £19,000.
Of course, your remortgage adviser will discuss all your options, and explain all the costs and implications clearly.
How Can I Check My Credit File?
Check your multi agency credit file with our partner: CheckMyFile
Please note: Check My File offers a FREE 7 Day trial that will enable you to download your current credit report. Please remember to cancel the subscription within 7 days, if you do not wish to continue with this service.
Can I Be Refused a Remortgage?
Yes, it is possible that your application for a remortgage can be refused because the offer of a remortgage is at the discretion of the lender. When lenders are considering your application, they will assess your financial situation as a whole, and will look to see if you can afford to make your monthly payments easily and on time.
Our team of experts will review your circumstances and carefully select the right mortgage lender to approach, as well as do a soft credit check first to ensure there is no impact on your credit file.
We can speak you through the whole process, and remove the stress. We will discuss and review the below for you.
Credit History
Typically, lenders are looking for a healthy credit score, or at least a minimum credit score. However, there is no ‘magic number’ as the number varies according to the credit reference agency (CRA). The main three agencies used are Experian, Equifax, and TransUnion. Bear in mind also that different lenders look for different things, but a common aspect looked at will be if historically you always make your payments on time. Missed payments reflect badly on your credit and are an important consideration for a potential lender.
How Can I Check My Credit File?
Check your multi agency credit file (which includes the suggestions above) with our partner: CheckMyFile
Please note: Check My File offers a FREE 7 Day trial that will enable you to download your current credit report. Please remember to cancel the subscription within 7 days, if you do not wish to continue with this service.
Income and Affordability
Do you have a steady salary with a regular payday? Is your salary increasing, or has it declined recently? Do you get paid on a regular payday, or perhaps you are a freelancer whose income is less predictable? Your income will be assessed in balance with your outgoing payments. Are your monthly payments easily covered by your monthly income, or do your outgoings exceed your income?
Existing Debts
How much borrowing are you repaying? Do you have an overdraft, loans, credit cards, store cards or other debts? Are you steadily reducing your debts, or just meeting the interest each month?
Property Value and Equity
The value of your home
Has your property increased or decreased in value? Have you made home improvements, or has the condition of your home deteriorated since you bought it?
The equity in your home
Equity in your home is the amount that you have paid off against your mortgage and includes the current value of your home. If your home is worth more than you owe, then you have equity which you could potentially release and use to clear other debts you may have.
Get Free Independent Debt Consolidation Remortgage Advice Today
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Shared Ownership Remortgage?
While a shared ownership remortgage for debt consolidation may be possible it might be more tricky than a traditional remortgage. You would apply for a remortgage in the usual way, but you will need to find a lender who deals with shared ownership mortgages and meet their eligibility requirements.
Fewer lenders offer shared ownership remortgages so approaching a professional mortgage broker will increase your chances of success. Here at The Mortgage Broker we have a wealth of experience and contacts within the industry to help you find the best lender and the best deal for your unique requirements.
Why Work With The Mortgage Broker
The Mortgage Broker is a team of award winning mortgage specialists, equipped with the tools and expertise to fast track your mortgage process and give you instant peace of mind in your current debt position. See how we have helped others achieve their homeownership goals.
From £1,835 to £751: A Debt Consolidation Win!
Initial Enquiry
The clients reached out to explore remortgaging an unencumbered property (A property with no mortgage). Their goal was to consolidate an existing secured loan and several other debts, extend the term, and ultimately reduce their monthly payments to make things more manageable.
| Commitment Type | Property Value | Balance | Loan to Value | Term | Payment Type | Interest Rate | Product Type | Payment |
| Secured Loan | £110,000 | £46,000 | 41.82% | 4 years | Repayment | 8.81% | Variable | £1,117.00 |
| Unsecured credit | £35,451 | Various | Repayment | Various | Variable | £718 | ||
| Total | £81,451 | £1,835.00 | ||||||
| Commitment Type | Property Value | Balance | Loan to Value | Term | Payment Type | Interest Rate | Product Type | Payment |
| Mortgage | £110,000 | £61,000 | 55.45% | 17 years & 6 months | Repayment | 4.23% | 5 year fixed rate | £412.00 |
| Two Car Loans | £21,872 | 5 years | Repayment | Various | Variable | £339 | ||
| Total | £82,872 | £751.00 | ||||||
| Monthly Saving | £1,084.00 |
The Challenge
The Solution
The Result
How Did this Help?
Remortgage for Debt Consolidation FAQ’s
Initially, remortgaging for debt consolidation can cause a temporary dip in your credit score because it involves applying for new credit. Over time, if debts are cleared and payments are managed well, your credit score is likely to improve.
Remortgaging can help alleviate credit card debt by releasing equity from your home, which can then be used to clear the outstanding balance. This process involves converting unsecured debt into secured debt.
Whether remortgaging affects your mortgage rate depends on your credit history and financial circumstances. Those with poor credit might face higher rates, whereas individuals with a good credit history might secure competitive rates similar to standard mortgages.
Lenders typically look at your credit score, the value of your property, your current mortgage balance, debt-to-income ratio, and employment status when considering a remortgage for debt consolidation. Sufficient equity in your home is essential.
Debt consolidation through remortgaging involves adding your existing debts to your mortgage, enabling you to make a single monthly payment. By remortgaging, you can potentially reduce monthly outgoings and simplify debt management, but you are securing more debt against your home.
There’s no official limit, but frequently remortgaging can negatively impact your credit score and make lenders wary of your financial management. It’s essential to assess whether this approach aligns with your long-term goals.
The choice depends on your credit standing and financial situation. Those with poor credit might find a secured loan more attainable, whereas individuals with good credit might benefit more from the competitive rates of remortgaging.
The main risk is that you’re turning unsecured debts into secured debt against your home, which could lead to repossession if you fail to meet repayment obligations. Also, spreading debt over a longer period could mean more interest paid overall.
When remortgaging for debt consolidation, you’ll typically need to provide identification, proof of income, credit reports, and documentation outlining your current mortgage details and outstanding debts.
The best time is usually when other debt management options have been exhausted. It’s generally advised to use remortgaging as a last resort due to the long-term commitment of paying off such debts.
Yes, by releasing equity, you can secure additional funds which may be used for home improvements, along with consolidating debts, offering the opportunity to simplify expenses and manage them effectively.
With bad credit, the process can be more challenging. It’s crucial to work with a mortgage broker who can help find lenders willing to offer terms despite a poor credit history, although higher rates may apply.
Alternatives to remortgaging include balance transfers, personal loans, debt management plans, and negotiating directly with creditors. These options may not require securing the debt against your home.
Delays in receiving mortgage funds can be stressful. It’s advised to maintain communication with your broker and lenders and manage payment obligations until the funds are processed. Consulting with professionals helps alleviate concerns efficiently.
Remortgaging can lower monthly payments by combining several debts into one, potentially with a lower interest rate. However, it is important to consider the total cost over the life of the mortgage.
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