When credit cards, loans, and everyday bills start stacking up, managing multiple repayments can feel overwhelming.
A debt consolidation mortgage can simplify things by combining your debts into one affordable monthly payment — often at a lower interest rate.
It’s not right for everyone, but in the right circumstances, it can help you regain control and protect your home.
At Mortgage Knight, we help homeowners decide if this route makes financial sense — and find lenders who handle it responsibly.
What Is a Debt Consolidation Mortgage?
It’s when you remortgage your home to release equity, then use that money to pay off unsecured debts such as:
- Credit cards
- Personal loans
- Car finance
- Overdrafts
- Store cards
You’ll then have one mortgage payment instead of several separate commitments — often reducing total monthly outgoings.
How It Works — Example
Let’s say you owe:
- £8,000 on credit cards
- £12,000 on a personal loan
- £5,000 on a car loan
- That’s £25,000 in total, with interest rates between 12–25%.
If your property is worth £250,000 and you owe £150,000 on your mortgage, you could remortgage to £175,000, repay all your debts, and roll them into one payment — usually at 4–6% interest.
- One payment
- Lower interest
- Simpler finances
The Benefits
Lower monthly payments:
- Spreading the cost over a longer term can ease monthly pressure.
- Simplified budgeting: One payment, one lender, one interest rate.
- Improved credit score: Clearing multiple debts can boost your score over time.
Peace of mind: Easier to manage and less financial stress.
Mortgage Knight always checks whether the new mortgage actually saves you money — both monthly and overall.
The Risks
- You’re securing debt against your home.
- Missed payments could put your property at risk.
- Longer repayment terms may mean paying more interest overall.
- Early repayment charges may apply on your current mortgage.
That’s why expert advice is crucial before consolidating debt into your mortgage.
Mortgage Knight helps you weigh short-term relief against long-term impact.
When It Might Be Right
A debt consolidation mortgage could help if:
- You have high-interest debts you’re struggling to clear
- You have equity available in your property
- You want to reduce outgoings and simplify finances
- Your credit score has recovered since taking out older debts
But if your debts are small or short-term, refinancing might not be the best option. We’ll always explain both sides clearly.
Lenders That Offer Debt Consolidation Mortgages
Several lenders — including Nationwide, Halifax, Kensington, and Precise — allow part of a remortgage to repay unsecured debts.
Specialist lenders can also help if your credit score isn’t perfect.
At Mortgage Knight, we compare over 90 lenders to find one that:
- Allows consolidation up to your needed amount
- Keeps your rate affordable
- Ensures your finances remain sustainable
How Mortgage Knight Helps
We’ll:
- Assess your current debts and future goals
- Calculate your new mortgage affordability
- Compare savings vs total costs
- Liaise with lenders who handle debt consolidation responsibly
You’ll get a clear, honest view of whether it’s the right move — not just a quick fix.
Case Studies
Case Study 1: Michelle – Consolidating Credit Cards
Michelle had £20,000 across several cards. We helped her remortgage with Halifax, reducing her monthly outgoings by £290 while keeping a manageable term.
Case Study 2: Dean & Sophie – Car and Loan Debts
The couple owed £27,000 in short-term finance. Mortgage Knight found a lender who allowed 80% LTV consolidation, cutting their repayments and saving £7,000 in total interest.
Case Study 3: Paul – Credit Blips but Strong Equity
Paul had some missed payments after lockdown. Using a specialist lender, we helped him consolidate £18,000 of debt into one affordable fixed-rate mortgage.
Frequently Asked Questions
Q1. Can I consolidate debt if my credit score is low?
Ans: Yes — some lenders are open to past credit issues if you have enough equity.
Q2. Will it affect my mortgage term?
Ans: You can choose to spread over your existing term or longer — we’ll show both options.
Q3. Is it cheaper to remortgage than take a loan?
Ans: Usually, yes — mortgage rates are lower, but remember the term may be longer.
Q4. Will I pay more interest overall?
Ans: Possibly, depending on term length — we’ll show you exact cost comparisons before proceeding.
Q5. Can I still remortgage in the future?
Ans: Yes — once your finances stabilise, you can remortgage again for a better rate or to shorten the term.
Professional Contractor Mortgage Guidance
If you’re a contractor looking for professional mortgage guidance, we’re here to help. Our specialist knowledge and lender relationships enable us to provide expert advice tailored to your situation.
Drowning in credit or loan payments?
Mortgage Knight can help you explore whether a debt consolidation mortgage makes sense — safely, transparently, and without pressure.
Speak to a Mortgage Adviser Today