What is a Debt Consolidation Mortgage?

A debt consolidation mortgage acts as a single loan, allowing you to borrow money against your property to repay and consolidate outstanding debts like unsecured loans, credit cards and store cards.

This type of loan is commonly used to combine debts and reduce monthly payments. In some instances, this can be life-changing; however, debt consolidation comes with a risk, as it increases the outstanding mortgage balance.

If you’re wondering whether to consolidate debt to repay unsecured loans, this is the guide for you. We cover everything you need to know, as well as how our advisors can help:

  1. The Debt Consolidation Journey
  2. Common Reasons to Apply
  3. Applying with Your Mortgage People
  4. Pros of Debt Consolidation
  5. Considerations Before Applying
  6. Types of Debt That Can be Consolidated
  7. Example of Debt Consolidation Costs
  8. Debt Consolidation vs Other Financing Options
  9. Debt Consolidation with Bad Credit
  10. Testimonials
  11. FAQs and Find Out More

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The Debt Consolidation Journey

(1) Sometimes in life bills pile up or loan repayments get missed, causing a lot of undue stress.

It can happen to anyone.

(4) ) If you’ve repaid a lot of your mortgage or if your property has increased in value, you’ll be in a strong position when looking for potential lenders, as you’ll have a large amount of equity in your home.

(2) If you find yourself in this position, one option is to combine these debts with your existing mortgage, usually resulting in one smaller monthly fee paid over a longer period.

(5) People with a poorer credit history may still be able to borrow on a mortgage to repay their debts – The important thing is to find great advice and identify a lender with criteria that you can meet.

(3) When you apply to consolidate debt, the chances of a lender accepting you will depend on a few factors, including your income, credit history and the equity you hold.

(6) Contact us if you’d like help repaying your debts or visit our support page here. While talking about your financial situation can feel daunting, at Your Mortgage People, we’re here to help, not to judge.

Common Reasons to Apply for Debt Consolidation

Stress Relief

If you’re repaying money to creditors, it can be very expensive as the interest rate charged for unsecured loans, credit cards and car finance is usually more than the rate charged for mortgages.

When that debt starts to add a mental weight to your life, it might be time for you to explore debt consolidation.

People apply for debt consolidation for various reasons, such as:
Simplifying Finances
Lowering Interest Rates
Debt consolidation is commonly used when people want to:
Reduce Monthly Payments
Avoid Default or Bankruptcy

A debt consolidation mortgage primarily aims to roll many debts into one, relieving stress and resulting in lower monthly repayments.

Applying with Your Mortgage People

If you’re worried about the stress and complexity that comes with applying for a debt consolidation mortgage, having a qualified broker by your side can make the world of difference.

Their guidance can be invaluable, simplifying your journey from start to finish and ensuring that you make informed decisions every step of the way.

The Steps to Applying with Your Mortgage People

  1. Send us an enquiry to get your debt consolidation journey started
  2. An advisor will make contact to discuss your financial situation, consider the best options for you and search for your new mortgage deal
  3. We help you compile everything you need for your application, and submit it to the lender
  4. The lender confirms their mortgage offer and your new mortgage begins on the new terms agreed
  5. Funds are released by the lender at the amount agreed in the mortgage terms, with you repaying the amount with interest as part of the mortgage


Fill out the form below to begin the process now:

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Pros of Debt Consolidation


One of main benefits of a debt consolidation mortgage is that it allows you to house all your debts with just one lender.

This stops the stressful accumulation of letters and calls that you might receive with multiple creditors.


Debt consolidation decreases your monthly payments and can even result in you paying less interest overall.

You might want to put these savings towards decreasing your remortgage or just enjoying a better living standard. A little extra cash in your pocket can go a long way.


With a debt consolidation mortgage, you can repay your debts which can positively affect your credit score, as those debts will appear as settled.

You’ll notice this improvement after a few month’s worth of regular and on-time payments, so make sure to stay on top of your fiances.

Considerations Before Applying

Before applying for debt consolidation, there are some important things you first need to consider:

Home Repossession

You’ll be adding unsecured debts like credit cards or car finance and securing it against your home, where you live. This is different to unsecured credit where the ownership of your home is not at risk.

Increased Interest

These main risks are paying more interest over the period due to the new mortgage being over a much longer term.

See an example below of how this works.

Types of Debt That Can be Consolidated

    Personal loans
    Payday loans
    Buy now pay later finance
    Credit cards

Example of Debt Consolidation Costs

Example of monthly savings on £15,000 debt:

£15,000 debt at 7% over 5 years = £297pcm | total interest payment = £2821
£15,000 debt at 4% over 15 years = £111pcm | total interest payment = £4971

Reduction in monthly outgoings  = £186
Total additional interest paid = £2150

*Calculated at 4% for entire term

Debt Consolidation vs Other Financing Options

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If you’re coming to the end of your mortgage deal, you might be able to switch to a new lender and borrow the extra funds you need. This is often the cheapest way to raise money.

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Subprime Mortgages:

If you are a homeowner seeking a subprime lender due to a low credit score and want to know what options are available to you then you are in the right place.

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Equity Release

If you’re over 55, Equity release products give you a chance to unlock the money in your home with no monthly repayments whilst you continue to live there.

Debt Consolidation With Bad Credit

Many lenders are open to offering loans to individuals with less-than-perfect credit scores.

From people dealing with County Court Judgements (CCJs) to those who have faced bankruptcy, there’s a sizable portion of the UK population grappling with credit issues.

Niche lenders that specialise in providing mortgages to individuals with bad credit, particularly those seeking to consolidate their debts, aim to tackle this issue.

However, securing a mortgage with a lower interest rate for debt consolidation can still pose challenges.

Most mainstream lenders perceive such borrowers as high-risk, making it harder to secure favourable terms, while niche lenders often require you to go through an intermediary, such as a mortgage broker like Your Mortgage People.

The good news: With careful consideration and the assistance of specialised a broker, you can often find a solution that suits your financial situation.

Our Google Reviews

""Very easy and understanding to speak with.

Explained everything in full and how we could save money. Always kept up-to-date during the process.

Will definitely recommend to others."

Date of experience: January 2024"

Liz Cook

""I received an amazing service from Aaron, Melanie and Toby.

I had nothing but constant support and help with all my questions and worries. If I could give 10 star review I would!
They are really a true credit to Your Morgage People!

Thank you 😊"

Date of experience: November 2023"

Kelly Kitson

""From the first meeting to the completion date everything was explained in an easily understandable way. The staff explained everything that was happening and kept me updated at every step."

Date of experience: November 2023"

Michael Henry

Find Out More

If you want to know more, why not check our guide to mortgage terms or FAQs section. We cover everything you need to know, explaining mortgage terms and commonly asked questions.

Alternatively, speak to one of our advisors to learn more about debt consolidation. Fill out a contact form by clicking the button below.