Combine eligible commitments
Subject to lender criteria and advice, borrowing may be used to repay credit cards, personal loans, overdrafts and other eligible unsecured commitments.
Debt consolidation options for homeowners
Explore two possible ways of consolidating eligible debts against your property: replacing your current mortgage with a debt consolidation remortgage or keeping it in place and arranging a separate secured loan.
Understanding the options
Debt consolidation involves using new borrowing to repay several existing credit commitments. This may bring a number of repayments together and can make monthly finances easier to manage.
Homeowners may be able to raise funds against their property through a remortgage or a secured loan. The appropriate route depends on the current mortgage, affordability, available equity, credit history and the total cost of the proposed borrowing.
Consolidating debt does not remove the amount owed. It changes how the debt is structured and may extend the period over which it is repaid.
Subject to lender criteria and advice, borrowing may be used to repay credit cards, personal loans, overdrafts and other eligible unsecured commitments.
The existing mortgage is repaid and replaced with a new mortgage that includes the additional borrowing required to repay eligible debts.
The existing first mortgage normally remains in place while a separate second charge mortgage or homeowner loan is arranged against the property.
A lower monthly repayment does not necessarily mean lower overall cost. The rate, term, fees and total amount repayable must all be compared.
Make an informed comparison
Both routes use the property as security, but they affect the existing mortgage differently. The comparison should include monthly cost, total repayable, fees and flexibility.
A remortgage repays and replaces it. A secured loan normally leaves it in place and creates a separate monthly repayment.
Leaving the current mortgage early can trigger a charge. Keeping it in place may avoid redemption, but the secured loan has its own costs and terms.
A remortgage may change the rate on the entire first mortgage balance. A secured loan may have a higher separate rate, so both total-cost illustrations should be compared.
Both routes are subject to lender affordability assessments, credit checks, property value and maximum loan-to-value requirements.
The advice process
We review your objectives, current mortgage and existing commitments before explaining which routes may be available and how their costs compare.
We discuss the current mortgage, property value, debts, income, expenditure, credit history and what you want to achieve.
We consider whether a remortgage, secured loan or another course of action may be appropriate for your circumstances.
We explain proposed repayments, terms, fees, early repayment charges, risks and the estimated total amount repayable.
If you proceed, we help with documents, valuation, lender requirements and communication through to completion.
Use the relevant enquiry page to provide some initial details. An adviser can review the wider position and explain whether another route should also be considered.
Useful next steps
Common questions
It may be possible to raise additional money through a remortgage and use it to repay eligible credit card balances. This depends on affordability, available equity, credit history and the lender’s criteria.
A secured loan may allow you to raise additional funds while leaving your existing first mortgage in place. The secured loan is a separate agreement with its own interest rate, term, fees and monthly payment.
An early repayment charge may apply when remortgaging before the current mortgage deal ends. A secured loan normally leaves the first mortgage in place, although its conditions and any consent requirements still need to be checked.
Previous missed payments, defaults or other credit problems do not automatically mean that no option is available. Lenders consider the type, amount and age of the credit issue, recent conduct, affordability and property equity.
Debt consolidation does not guarantee an improvement in your credit score. Future payment history, credit usage and your wider credit profile will continue to affect your credit record.
Self-employed homeowners may be considered, subject to affordability and lender criteria. Evidence such as accounts, tax calculations, tax-year overviews or business bank statements may be requested.
The amount available depends on the property value, existing mortgage balance, income, expenditure, credit history, loan purpose and the lender’s maximum loan-to-value limits.
Secured loans arranged behind an existing first mortgage are commonly described as second charge mortgages, second mortgages or homeowner loans.
Choose the most relevant route to provide some initial details. The team can then understand your objectives and direct you to an adviser experienced in that area.
Think carefully before securing debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it. Consolidating debts may reduce monthly payments but can increase the total amount repayable.