Remortgaging to consolidate debt

Getting into debt can create added stress and worry in your life as well as being expensive if you incur interest rate charges. But there are often solutions such as consolidating your debt, which you may have accumulated on credit cards, bank loans or store cards, and then paying it off with mortgage funds. If you’re wondering how you go about using equity in your property to pay off debt, the following information will guide you.

If you own a property with a mortgage and have incurred debts, there may be an option to increase the amount of money you borrow against your property (your mortgage) to pay them off. This process usually involves increasing the amount of money you borrow from a lender so you can then allocate that money to the credit card or loan you’ve taken out. This process is known as consolidating your debts and can provide a solution to help you manage your finances more effectively.

Although it is not certain and often depends on the current economy or terms you have agreed to, the interest rate you get on a mortgage can be significantly lower than the interest rate on a loan. This is why it is often a sensible solution to add your debts to a mortgage, meaning you will pay back less in fees over time.

If you believe you have equity within your property and that you could borrow more money from a lender (this will depend on your income), the first thing to do is review the terms of your current mortgage. It is quite unusual, although not unheard of, to increase a mortgage mid-term. So if you have signed up for a three-year fixed term mortgage rate, in most cases you will need to wait until this term expires to apply for an extension to what you borrow or pay a penalty. If your debts have become unmanageable and you have serious concerns about repayments or covering the cost of your mortgage, we recommend calling one of the Private Wealth Mortgages team immediately. We will be able to make recommendations for the type of mortgage that would help you manage the application process.

Once you have assessed whether you can afford to borrow more money on your mortgage, it’s time to review the options available to you. If you are coming to the end of your current mortgage term, you can either choose your existing lender and request a new mortgage arrangement taking into account the additional funds you’d like to borrow. Or alternatively you can select a mortgage from a new bank or lender. At Private Wealth Mortgages, we always provide a range of options to choose from, based on your financial requirements, goals and lifestyle. This means you are more likely to select the mortgage that is affordable, offering you added . You can use our mortgage calculators as an indicator of what you can afford when it comes to remortgaging. Just click here to complete the form.

One of our expert and qualified brokers can help you if you want to consolidate debt. We take the time to get to know you, your financial situation and personal goals, before presenting you with a range of appropriate mortgage options. To speak to one of our mortgage advisors call us on 01403 270006.


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Private Wealth Mortgages Ltd is authorised and regulated by the Financial Conduct Authority. FCA Number: 445980

Private Wealth Mortgages Ltd, Hillreed House, 54 Queen St, Horsham, West Sussex, RH13 5AD

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