It's Free to Speak to an Advisor, 7 days, 8am - 10pm

How to Remortgage to Pay Off Debt

How to Remortgage to Pay Off Debt

In this article

Accordion Arrow

For homeowners, managing multiple debts can be overwhelming. Remortgaging to pay off debt is a popular strategy known as a debt consolidation mortgage.

This article explains how debt consolidation with a mortgage works, its pros and cons, and answers to frequently asked questions.

Remortgaging to Pay Off Debt

Explained in 1 min 44 seconds

Find more videos like this on MoneymanTV

Can I Remortgage to Pay Off Debt?

Yes, if you are a homeowner with significant equity, it is possible to remortgage to pay off your debts.

This process, known as a debt consolidation mortgage, is a specialised type of lending that allows you to consolidate your debts into a single mortgage payment.

Understanding this option and how it works can help you make an informed decision about whether it is the right choice for you.

How Does Debt Consolidation Work?

Debt consolidation involves using the equity in your home to repay your debts. Here’s how it works:

  • Equity Release: You release some of the equity built up in your home to pay off unsecured debts like credit cards, personal loans, and other liabilities.
  • Loan Options: There are several ways to do this, including a further advance, a remortgage, or a secured loan. Speaking with a trusted, independent mortgage advisor is essential to determine the best option for your situation based on your income, credit score, and current mortgage details.

If you are an older borrower, don’t worry as we have lots of mortgages for over 50 options available that include a remortgage to pay off debt.

Speak to an Advisor – It’s Free!

Schedule a free callback from one of our experts today.

  • All situations considered
  • Transparent and honest mortgage advice
  • We search 1000s of purchase and remortgage deals

Our customers rate us 4.9/5

Reviews.io White Logo

The Pros of a Remortgage to Pay Off Debt

While a debt consolidation mortgage can be appealing, it’s important to weigh the benefits:

  • Peace of Mind: Knowing that your debts will be repaid at the end of the mortgage term can provide significant peace of mind.
  • Simplified Payments: Consolidating multiple debts into one manageable payment simplifies your financial life.
  • Structured Repayment Plan: A single repayment plan can help you stay organised and potentially improve your financial discipline.

The Cons of a Remortgage to Pay Off Debt

However, there are also significant drawbacks to consider:

  • Higher Overall Interest: Extending your mortgage term means you will likely pay more interest over time.
  • Risk of Repossession: Your home is at risk if you fail to keep up with mortgage payments.
  • Potential for More Debt: If you are prone to overspending, consolidating debt might not solve your financial issues and could lead to further debt accumulation.

How Can I Pay My Debts by Remortgaging?

To pay off your debts by remortgage, you need sufficient equity in your home. Here’s a step-by-step process:

  • Assess Equity: Equity is the difference between your property’s market value and your outstanding mortgage balance. You need enough equity to cover the debts you wish to consolidate.
  • Lump Sum Payment: You will use the equity released from your home to pay off unsecured debts, which then merge into your mortgage balance. This means you will have a larger mortgage to repay over a longer term, resulting in more interest paid overall.

Can You Remortgage Early?

Remortgaging early can be complex and costly. Typically, people start the remortgaging process about six months before their current mortgage deal ends to avoid early repayment charges.

Remortgaging earlier than this can incur significant costs, which might outweigh the benefits of consolidating your debt.

Always speak with a mortgage advisor to understand the financial implications and explore alternative options if necessary.

Are You Able to Take Out a Further Advance?

A further advance mortgage allows you to borrow additional money from your current lender, often at a different interest rate than your primary mortgage.

While this can be a suitable alternative for home improvements, it’s not always ideal for debt consolidation due to the risks involved.

Securing additional debt against your home increases the risk of repossession if you cannot keep up with payments. It’s important to evaluate this option carefully with the help of a mortgage broker.

Should I Remortgage to Pay Off the Debt?

Deciding whether to remortgage to pay off debt depends on your unique financial situation.

While it can be beneficial in some circumstances, it also carries significant risks and should not be taken lightly. Here are key considerations:

  • Evaluate Alternatives: Before committing, explore other debt consolidation options, such as a further advance or a secured loan.
  • Speak to a Mortgage Advisor: Speaking to a qualified mortgage expert can help you determine if remortgage is the best course of action for you. They can provide personalised advice and recommend alternative solutions if they are more suitable.

Remortgaging to Pay Off Debt

Remortgaging to pay off debt can be a viable solution for homeowners with substantial equity. However, it’s essential to understand the risks and benefits thoroughly.

Speaking with a mortgage advisor can provide valuable insights and help you make an informed decision that aligns with your financial goals.

Whether you decide to proceed with a debt consolidation mortgage or explore other options, taking control of your debts is a key step toward financial stability.


Latest Specialist Guides

Author Image of Wayne Dewsbury - Mortgage Advisor at UK Moneyman Ltd.

About the Author

Wayne Dewsbury

Mortgage Advisor at UK Moneyman Ltd.

There are unlikely to be very many advisors in the UK with Wayne’s wealth of experience. Having joined Nationwide as a Trainee Manager in 1983, he has gone on to perform a wide range of Management and Business Development roles with a number of prominent UK Building Societies and Mortgage Companies and has been a regular contributor of articles and TV/Radio comment.

He continues to advise right across the spectrum from young first time buyers, landlords and to clients in the later stages of life. Whatever the age of the client, he embodies UK Moneyman’s commitment to find the right deal for any customer’s needs and priorities.

Outside work, Wayne is a keen follower of rugby league and spends a lot of time chasing his grandchildren around!

Learn More

Continue Reading

UK Moneyman Limited is Registered in England, No. 6789312

Registered Address: 9 Gallows Lane, Beverley, United Kingdom HU17 7FJ.

Authorised and Regulated by the Financial Conduct Authority.

We are entered on the Financial Services Register No. 627742 at www.register.fca.org.uk.

© UK Moneyman Limited 2025.

Equity Release Council Logo Facebook Image X Logo Instagram Image YouTube Image LinkedIn Image SpotifyImage

We value your privacy

This website uses cookies. If you continue to use the site, we will assume that you agree with our use of cookies.