Remortgaging to Reduce Monthly Outgoings:A Step-by-Step Guide
A clear, practical walkthrough for UK homeowners considering a debt consolidation remortgage.
Important Information
This content is for educational purposes only and does not constitute financial advice. CHFinance is authorised and regulated by the Financial Conduct Authority. Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.
If you feel like you are juggling multiple payments across credit cards, car finance, and personal loans, and it is becoming harder to keep track, you are not alone. Many homeowners in the UK look for ways to simplify their finances and ease pressure on their monthly budget.
For some homeowners, a debt consolidation remortgage may be one option to consider, depending on their circumstances and the costs involved. This means using available equity in your home to repay other debts and moving them into your mortgage.
Here is our step-by-step guide to how the process works and how to get started.
Assess Your Current Debts
Before making any moves, get a clear picture of what you owe. Make a list of every credit card, store card, and loan. For each one, note:
- The current outstanding balance.
- The interest rate (APR).
- The monthly payment.
- Any early repayment charges (ERCs) for paying the loan off early.
Debt Assessment Tool
Build the debt list lenders and advisers usually ask for
before they can assess whether remortgaging could help.
Debt 1
Enter the figures from your latest statement or settlement quote.
Approx. monthly interest now: £ 87.15. At this payment level, this debt could clear in 4y 3m with roughly £ 2,618 more interest.
Snapshot
£ 4,200
Approximate amount needed to clear the listed balances and early repayment charges.
Current monthly payments
£ 135
Blended APR
24.9%
Interest added monthly
£ 87.15
Early repayment charges
£ 0
What stands out
Highest APR debt
Credit card at 24.9%
Estimated debt-free timeline
4y 3m
Estimated interest left at current payments
£ 2,618
Use the totals as an organised starting point only. Actual settlement figures, promotional rates, and lender affordability checks can change the outcome.
Check Your Home Equity
Equity is the portion of your home that you truly own. The difference between your home's current market value and your remaining mortgage balance. To consolidate debt, you typically need enough equity to cover the extra borrowing. Even if you have equity, lenders will still assess affordability and may limit how much you can borrow.
Tip: You can get a rough idea of your home's value using online valuation tools, though a lender will eventually require a professional valuation.
Review Your Options with a Qualified Mortgage Adviser
Debt consolidation through a remortgage is a significant financial decision. Our qualified mortgage adviser can help you understand the costs, risks, and alternatives, and explain whether this route appears suitable for your circumstances.
If you want personalised guidance, a CeMAP-qualified adviser can help you explore your options.
The Agreement in Principle (AIP)
Our adviser will help you secure an Agreement in Principle. This is a document from a lender stating how much they are likely to let you borrow based on a soft credit check, which will not impact your credit score.
Formal Application and Valuation
Once you have chosen a deal, we handle the heavy lifting by submitting the formal application. The lender will then:
- Perform a hard credit check.
- Verify your income and outgoings.
- Conduct a professional valuation of your property.
Legal Work and Completion
A solicitor or conveyancer will handle the legal transfer of the mortgage. When everything is approved, the new mortgage funds are used to pay off your existing mortgage and the agreed debts. You are then left with one monthly payment, although the total amount repaid over time may increase depending on the term.
Before you decide
Is it Right for You? Key Considerations
Reducing monthly outgoings can help in some cases, but it is important to understand the trade-offs and risks before turning short-term debts into longer-term borrowing secured on your home.
Secured vs. Unsecured: You are moving unsecured debt like credit cards onto borrowing secured against your home, which means your home may be at risk if you do not keep up repayments.
Affordability and Lender Criteria: Even if you have enough equity, lenders will still assess affordability, loan-to-value limits, and their own lending criteria.
Total Cost over Time: Even if your monthly payment is lower, spreading debt over a 25-year mortgage term may mean you pay more in total interest over the long run.
Fees: Be sure to factor in arrangement fees, legal costs, and any exit fees from your current lender.
Behaviour and Budgeting: If spending habits do not change, debts can build up again after consolidation.
Ready for next steps?
Start a quick quote and we will show you the options most likely to fit your situation.
No obligation. Checking will not affect your credit score.