Consolidating unsecured debts into a mortgage secures them against your home. If you cannot keep up repayments, your home may be repossessed. You may also pay more total interest over the mortgage term than you would on the original unsecured debts, even if the monthly payment falls.
Quick answer
Remortgaging to consolidate debt replaces high-rate unsecured borrowing (credit cards, loans) with a larger mortgage at a lower rate. Monthly payments fall significantly, but the debt is now secured against your home and spread over many more years - meaning total interest cost can actually be higher. This can be the right choice for people in real financial difficulty with a clear repayment plan, but it should never be done without understanding the full long-term financial and risk implications.
Mortgage advice note: This page provides general information only. For personalised advice, speak to an FCA-authorised mortgage adviser who can assess your individual circumstances.
The Mathematics You Must Run
Before consolidating into a mortgage, calculate:
- How much total interest you would pay on each existing debt at your current rate and minimum/current payment schedule
- How much total interest the same amount added to your mortgage would cost over the remaining term
- The monthly saving - and whether you actually have a reliable plan to reduce your mortgage faster to offset the longer term
The monthly saving may be compelling but the lifetime cost comparison may tell a different story.
The Risk That Must Be Understood
When debt is unsecured, the worst outcome of default is severe - damaged credit, court judgements, debt collection. But you retain your home. When that same debt is secured as part of your mortgage, the worst outcome changes fundamentally: your home can be repossessed. This is a categorically different level of risk and must be central to your decision.
When Consolidation via Mortgage Can Make Sense
There are situations where the benefits genuinely outweigh the risks:
- The monthly saving genuinely makes the total debt manageable and prevents default on all obligations
- You have a concrete plan to overpay the mortgage and eliminate the additional balance faster than the standard term
- You have addressed the underlying cause of the debt accumulation (spending habits, income situation)
- A debt adviser has confirmed this is the most appropriate route given your full financial picture
Getting Impartial Advice First
Free debt advice services including StepChange and MoneyHelper can help you assess whether consolidation into your mortgage is the right structural solution, or whether other options better protect your long-term financial position. Their advice is free and confidential.
Frequently Asked Questions
It depends entirely on the numbers and your confidence in long-term repayment. Consolidating to your mortgage rate will almost certainly lower the monthly payment - but spreading credit cards, loans, or overdrafts over a 15-25 year mortgage term can mean paying significantly more total interest. A £10,000 credit card debt cleared in 2 years at 20% APR may cost £2,200 in interest. The same amount added to a 20-year mortgage at 5% costs about £6,700 in total interest. The monthly saving is real, but the lifetime cost comparison must be made honestly.
The most serious risk is that debts which were previously unsecured (where the worst consequence of default was credit damage and legal action) become secured against your home. If you cannot maintain the higher mortgage payment - which includes the consolidated debts - the lender has the right to repossess your property. This is a fundamentally different level of consequence than a credit card or personal loan default.
Not automatically. Lenders carry out affordability assessments on the proposed new mortgage, which includes the higher repayment resulting from the additional borrowing. If the consolidation improves your monthly cashflow but the lender has concerns about your underlying financial stability, they may decline. Your credit file will also be reviewed. Specialist lenders handle more complex applications than high-street banks.
Yes - this is strongly recommended. A free debt adviser from StepChange or MoneyHelper can help you objectively assess whether consolidation via remortgage is genuinely the right option or whether other approaches - such as a debt management plan, negotiating with creditors, or a personal loan - would serve you better without putting your home at risk.
Most lenders accept most personal debt types - credit cards, personal loans, overdrafts, and store cards. Business debts, tax liabilities, and some secured debts may be treated differently. You must declare the purpose accurately in your application and typically provide statements showing the debts being cleared at completion. Some lenders may require confirmation that the accounts are closed after consolidation.
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