Debt Consolidation Mortgages & Remortgages

Considering A Debt Consolidation Mortgage? Find out how to secure the best rate

Are you looking to consolidate outstanding debt in to your mortgage?

Home Remortgages Debt Consolidation Mortgages & Remortgages
Pete Mugleston

Author: Pete Mugleston

Mortgage Advisor, MD

Jon Nixon

Reviewer: Jon Nixon

Director of Distribution

Updated: March 14, 2024

How we reviewed this article:

Our experts continuously monitor changes in the financial space and work closely with qualified mortgage advisors for factual verification.

March 14, 2024

We’ll look at the different ways to consolidate debt using the equity you’ve built up in your home and how to assess whether a debt consolidation mortgage might be the right option for you.

Can you consolidate debt into a mortgage?

Yes, you can. If you have a mortgage, there are a number of ways you may be able to use the equity you’ve built to consolidate other debts and better manage your finances into one single payment. You must be a homeowner, however, as you cannot consolidate debt into a new mortgage as a first-time buyer.

What debts can you consolidate into a mortgage?

Almost any type of unsecured debt can be consolidated into your existing mortgage.

This includes:

  • Loans
  • Credit cards
  • Hire purchase agreements
  • Store cards
  • Overdrafts
  • Student finance
  • And other forms of debt

Maximise your chance of approval with a dedicated debt consolidation specialist

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How to get a debt consolidation mortgage

Your first step should be to speak to a broker who specialises in debt consolidation remortgages as their knowledge and expertise could help you get a much better deal.

Make an enquiry and we’ll match you with an expert in this area who can help with:

  • Calculating your LTV (Loan to value): This will tell you how much equity you can release. You can work it out yourself by using this calculator but your broker will then match you with the lender who is best placed to help based on your ratio.
  • Downloading your credit reports: You can do this by accessing a free trial, but it’s best to have a mortgage broker on your side so they can help you optimise your credit files and ready them for your application.
  • Finding the ideal lenders for debt consolidation: The right mortgage broker will have a network of contacts in this area and they can help you secure the best rate through one of the lenders they work closely with.

How do they work?

Homeowners with an active mortgage have 3 potential options when it comes to using their mortgage to consolidate debts, these are:

We’ll have a look at how each of these works below.

Further Advance

This is essentially increasing the amount of your existing loan, without changing the mortgage terms or provider, although the additional borrowing may be offered at a higher rate of interest.

There is typically a minimum amount that you can increase your loan by (often in the region of £5k). There is also often a maximum percentage you’ll be able to increase the LTV (Loan to Value) of your borrowing to, and it’s typically capped at around 85%. You may also have to pay administrative fees for the arrangement of the additional borrowing.

If your lender offers this facility, you’ll need to meet their criteria for borrowing more, which will vary from one lender to the next, but usually means:

  • You’ll need to have had the mortgage in place for at least 6 months
  • You’ll need to undergo another credit check and affordability assessment
  • You may need to provide proof of the debt you plan to clear
  • You may need a new property evaluation to determine your equity (the amount you own)


There are many reasons you might consider a remortgage, and whilst it’s often associated with securing a better interest rate, you can also remortgage to consolidate your debts. This means that you’ll switch to another lender, take out a mortgage with them to repay your existing mortgage and borrow an additional amount to repay your debts.

This could be an appropriate option for those looking to consolidate a significant amount of debt, as, typically, a remortgage allows you to increase your borrowing more than a further advance would.

Second Charge Mortgages

The name can be misleading here, as a second charge mortgage, also known as a second mortgage, is simply a loan that’s secured against your home. Because your mortgage is already secured against the property, that’s the first charge against the property. Therefore, if you use the same property as loan security, this will be the second charge against it.

This option can be useful for those who may not qualify for a remortgage or further borrowing due to bad credit, as second charge loans are based more heavily on the value of your equity, rather than the more traditional affordability or eligibility factors used to approve a mortgage.

Do you have to remortgage with your existing lender?

No, but it’s always a good idea to see what kind of deal they would be willing to offer so you can compare that with what else is available. One thing to keep in mind with debt consolidation remortgages is that some lenders have an LTV cap set at 60-85% if you are using the released equity to pay off debt.

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Calculate your debt consolidation

Our mortgage calculator will help you to determine how much you could reduce your monthly outgoings by consolidating your debts with your mortgage.

Debt Consolidation Remortgage Calculator

Our remortgage calculator can tell you what your new loan-to-value (LTV) ratio and repayments will be after you've remortgaged to consolidate your debts

Estimate if exact value is unknown
Estimate if exact value is unknown
Amount must be less than property value
Enter the amount of debt you're consolidating
What will the new term length be after you've refinanced?
Enter the mortgage rate, 5.5% is a typical rate currently but this can vary

New LTV:

After you have remortgaged your new LTV ratio will be and your new mortgage payments will be as indicated below…

New Monthly Repayments:

Get started with an expert broker to find out how much they can help you save on your remortgage.

Remember that calculators only ever provide a guide, and the results should not be taken as a guarantee of your borrowing or saving potential. A broker will help you to determine a more reliable figure.

Pros and cons of consolidating debt

It’s perfectly possible to use your mortgage to consolidate your debt, however, the next important question to ask yourself is whether you should. The main arguments for and against are outlined below.

It’s also important that you speak to a qualified mortgage broker and get the right advice before taking on any additional form of secured lending, given the level of risk involved with using your home as collateral.


  • It can potentially reduce your overall monthly outgoings.
  • The interest rates on secured borrowing are typically much lower than on unsecured borrowing
  • It could simplify your financial management to repay all of your debts to one lender, rather than staying with multiple lenders, each with different rates of interest


  • Any additional secured borrowing against your home puts it at greater risk, should you become unable to make the repayments
  • You could end up paying more interest overall, even at a lower rate (if the term is longer)
  • Increasing your mortgage debt reduces the amount of equity you hold in your home, and can affect the interest rates available to you, as competitive rates tend to be reserved for low LTV borrowing

It’s also important that you speak to a qualified mortgage broker and get the right advice before taking on any additional form of secured lending, given the level of risk involved with using your home as collateral.

Debt consolidation example

The table below shows how the overall amount you would repay on standalone debts compares to consolidating them onto your mortgage.

Debt Amount Rate Term Overall Amount Repaid
Credit card £3,000 20% 10 years £6,957
Personal loan £10,000 5% 10 years £12,728
Business loan £3,000 6% 10 years £3,997
TOTAL: £16,000 TOTAL: £23,682
Mortgage £16,000 5% 10 years £20,365

As you can see, the same amount of debt results in a lower overall payment when consolidated onto a mortgage, rather than spread out across three different interest rates.

Keep in mind that these figures are purely for example purposes and the amount you will repay overall can be higher if spread out over a longer period.

Which lenders offer mortgages for consolidating debt?

There are a wide range of lenders available, but each will have their own criteria. Some lenders will limit how much debt is possible to consolidate, whilst others don’t.

Here is an example of the lenders available and some of their criteria:

  • Halifax: Don’t currently limit the amount of debt you can consolidate, so long as the maximum borrowing does not exceed 85% LTV.
  • HSBC: Caps the debt you’re allowed to consolidate at £50,000 and further restricts that borrowing to a maximum of 80% loan to value (60% for interest-only). They will also still factor the debts that will be paid off into affordability, the same as Santander and Platform.
  • Nationwide: Imposes a maximum loan-to-value limit on their borrowing of 80%.
  • Santander: Allows up to 85% LTV and have an additional cap of £50,000 when the loan is for consolidation purposes. It’s also worth noting that some lenders, including Santander, only offer this type of mortgage deal through an intermediary, which means you’ll need to speak to a broker in order to access it.

What are the main factors which lenders will assess?

The most important factor is your loan-to-value ratio as some remortgage providers insist on a cap of between 60-85% if you are consolidating debt.

You will also need to meet the lender’s general eligibility criteria, which will include an assessment of the following:

  • Credit history: The cleaner your credit, the better your chances of securing a good deal, although there are usually options for borrowers with bad credit.
  • Age: You won’t qualify for a remortgage with some lenders if you are over 75, but with other providers, it can be 85 or higher.
  • Property type: If your property has any non-standard construction, such as a thatched roof, timber frame or is a listed building, your choice of remortgage lenders will be fewer.

Which lenders have you already tried?

Select the tiles below to continue:


What if you have bad credit?

If you have bad credit, it may affect your chances of securing a mortgage to consolidate debt, however, this will depend on the severity and age of your credit issues, as well as the lender. Some lenders specialise in bad credit mortgages, and could possibly offer you a remortgage for debt consolidation, even if others are unable to help.

In some cases, it may not be possible to remortgage until your credit record is in better shape. Some mortgage lenders may be particularly reluctant to offer a remortgage if you’re in arrears or have missed payments on your existing mortgage.

Can you remortgage a Shared Ownership mortgage to consolidate debt?

It’s certainly possible but may be more difficult, as you’ll need to consolidate debt with a mortgage lender that still offers Shared Ownership mortgages, reducing the number of lenders available to you. The brokers we work with will be able to help you find lenders that can help.

It’s also worth bearing in mind that the terms and conditions of your shared ownership scheme may vary depending on which housing association you’re connected to. Informing them of your intention to remortgage is also recommended.

Get matched with a debt consolidation mortgage broker

If you’re planning to consolidate your debts by utilising the equity in your home, it’s important to seek the right advice from an expert in this area of lending.

The brokers that we work with have the knowledge and experience to help ensure that you make the right decision for your circumstances.

Simply contact us on 0808 189 2301 or make an enquiry and we’ll introduce you to the most appropriate broker for your needs. Our service is completely free of charge, so you have nothing to lose!

Maximise your chance of approval with a dedicated debt consolidation specialist

Get Started Phone Icon 0808 189 2301


If you’ve already repaid your mortgage, it’s still possible to remortgage on an unencumbered property, and some lenders will even offer 95% of the cost of your home, depending on your affordability.

It’s very important to consider that using your home as collateral when you own it outright is an enormous decision, and should by no means be made without seeking expert advice.

In the short term, there may be a dip in your credit score as your lender conducts the necessary searches prior to approving your new loan. However, the long-term prospects should be much more positive as you have everything under one payment – as long as you keep to your repayment schedule.

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About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for Online Mortgage Advisor of course!

Read more about Pete

Pete Mugleston

Mortgage Advisor, MD

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