This article is for general information only. It is not financial advice and does not recommend a specific lender or product.

Remortgaging to clear unsecured debt involves borrowing more against your home and using the extra money to pay off credit cards, loans, or other balances. It can lower your monthly outgoings, but it also turns unsecured debt into debt secured on your property, and it may cost more in total interest over time.

This article gives you information to help you understand how this works. It is not personal financial advice. Your own circumstances will affect whether this approach makes sense for you.

Mortgage risk warning: Your home may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.

What does remortgaging to pay off debt actually mean?

When you remortgage to clear debt, you increase the size of your mortgage, releasing equity you have built up in your home. The lender pays out the additional borrowing, and you use that money to clear the unsecured balances you want to repay.

The result is a single monthly mortgage payment rather than several separate debt repayments. Because mortgage rates are generally lower than credit card or personal loan rates, some people find their total monthly outgoings fall. That is the main reason people consider it.

However, the debt does not disappear. It moves. And where it moves to matters.

What are the risks of remortgaging to pay off debt?

Unsecured debt becomes secured debt. This is the most important thing to understand. Credit card balances and personal loans are unsecured, meaning the lender cannot take your home if you cannot pay. When you roll that debt into your mortgage, you are putting your property at risk. If you cannot keep up with the new mortgage payments, the lender has the legal right to repossess your home.

You may pay more in total, even at a lower rate. Mortgage terms typically run for 20 to 30 years. If you add debt to your mortgage and stretch repayment over many years, the total interest can be significantly higher than it would have been under a shorter-term unsecured loan, even if the monthly payment is smaller. The MoneyHelper service notes this as one of the key risks of debt consolidation through a mortgage (https://www.moneyhelper.org.uk/en/money-troubles/dealing-with-debt/should-i-consolidate-my-debts).

Illustrative worked example. £10,000 of credit card debt at 22% APR, repaid over three years, would cost approximately £3,600 in total interest (illustrative figure, assuming a standard reducing-balance calculation). The same £10,000 added to a mortgage at 4.5% APR and repaid over 20 years would cost approximately £5,200 in total interest over that period (illustrative figure). Even though the monthly mortgage payment on that portion would be far smaller, the longer term means you pay more in total. These figures are for illustration only and will differ based on your actual rate, term, and repayment method.

Costs can reduce any saving. Remortgaging involves costs: an early repayment charge on your existing deal (if you are still in a fixed or tracker period), a product arrangement fee, valuation and legal fees. These can amount to several thousand pounds. A lower monthly payment does not always mean you are paying less overall.

You could end up with more debt. Some people remortgage to clear credit card debt and then run up the cards again. If that happens, you carry both the higher mortgage and new unsecured debt. It is worth thinking about what will happen to the freed-up credit card limits after consolidation: leaving them open and available can make it easier to accumulate new balances on top of the enlarged mortgage.

When can remortgaging to pay off debt help?

There are situations where this approach may be worth considering:

  • You have a significant amount of high-rate unsecured debt that is genuinely unmanageable at its current monthly cost.
  • You have meaningful equity in your home and your loan-to-value ratio after remortgaging would remain acceptable to lenders.
  • Your mortgage is not in a fixed period with a high early repayment charge, or the charge is small relative to the saving.
  • You are confident you can keep up with the new, higher mortgage payments consistently.
  • You have addressed the spending patterns that caused the debt to accumulate, so you will not rebuild it.

Even in these circumstances, it is worth comparing the total amount repayable (not just the monthly payment) with the alternatives before making a decision.

When can remortgaging to pay off debt make things worse?

Be careful if any of these apply to you:

  • You are already missing payments or struggling to meet minimum repayments. Taking on a larger mortgage in this situation carries real risk.
  • Your income is unstable or likely to change. Mortgage lenders carry out an affordability check, and your new payment must be sustainable even if your circumstances shift.
  • You are early in a fixed-rate deal with a substantial early repayment charge. The charge may cost more than the interest you would save.
  • The total interest on the new mortgage, calculated over the remaining term, is higher than what you owe on your unsecured debt at its current rate.
  • You have not resolved the cause of the debt. Adding debt to your mortgage while continuing to use credit in the same way can lead to a worse position.

If you are already struggling with repayments, free debt advice is usually a more appropriate starting point than applying for more borrowing.

What to check before making a decision

Before approaching a lender or broker, a useful first step is to gather the following information:

  • The current balance and interest rate on each debt you want to clear.
  • The remaining term and rate on your existing mortgage.
  • Whether you are inside a fixed or tracker period and what the early repayment charge would be.
  • How much equity you hold in your home (current property value minus the outstanding mortgage).
  • The total amount repayable under a remortgage versus keeping your existing debts and repaying them separately.

Using a loan repayment calculator can help you compare total costs rather than just monthly payments. You may also want to speak to an independent mortgage adviser, who is required by the FCA to assess whether any recommendation is suitable for your circumstances.

What are the alternatives worth comparing?

Remortgaging is not the only option for managing multiple debts. Alternatives that may be worth considering include:

Debt consolidation loan (unsecured). An unsecured personal loan used to consolidate debt keeps the borrowing off your property. The rate may be higher than a mortgage, but the term is shorter and your home is not at risk. This option is often overlooked by people who focus only on the monthly payment rather than the total cost. See our guide to debt consolidation for more on how this works.

Balance transfer credit card. If your debt is on credit cards, a 0% balance transfer card moves the balance to a lower or zero-rate deal for a fixed period. There is usually a transfer fee, and the 0% period ends eventually. This can be a cost-effective route for smaller balances if you are confident you can clear the debt before the promotional rate expires.

Debt management plan. A free debt management plan, arranged through a charity such as StepChange, consolidates payments to creditors into one monthly amount at a level you can afford. Your creditors may agree to freeze interest. This does not involve any new borrowing, and it leaves your home entirely outside the arrangement.

Negotiating directly with creditors. Some creditors will agree a temporary payment reduction or freeze if you contact them early and explain your situation. This is often the fastest first step and costs nothing to try.

Free debt help

If you are worried about debt, free advice is available from regulated charities. They are not paid by lenders and will help you look at your full situation.

  • StepChange Debt Charity: 0800 138 1111 (free, including from mobiles)
  • National Debtline: 0808 808 4000 (free, including from mobiles)
  • MoneyHelper: 0800 138 7777 (free government-backed service)

All three offer confidential advice and will not pressure you into any particular course of action.

Frequently asked questions

Will remortgaging to pay off debt affect my credit score?

Applying for a remortgage involves a hard credit search, which leaves a short-term mark on your file. If the remortgage goes ahead and you consistently repay on time, that can have a neutral or positive effect over time. Missing mortgage payments, however, is far more damaging than missing unsecured payments.

Can I remortgage if I am already in debt arrears?

Arrears on existing credit make it harder to be accepted for a remortgage. Lenders look closely at your recent repayment history. If you are behind on payments, speaking to a free debt adviser before applying for any new credit is usually a more appropriate first step.

How much equity do I need to remortgage and pay off debt?

Most mortgage lenders require you to retain a minimum level of equity after the new mortgage. Many mainstream lenders cap borrowing at 85% loan-to-value (LTV), meaning you would need to retain at least 15% equity in your home after the remortgage. The FCA's mortgage rules require lenders to carry out an affordability assessment regardless of LTV (https://www.fca.org.uk/consumers/mortgages). The exact LTV limit depends on the lender and the product.

Is it cheaper to remortgage or take out a personal loan to clear debt?

It depends on your circumstances. A personal loan typically carries a higher interest rate but runs for a shorter term, so you may pay less total interest overall. A remortgage may offer a lower rate, but stretching debt over many years can increase what you pay in total. Comparing the total amount repayable on both options is a useful starting point.

What happens if I cannot keep up with mortgage payments after remortgaging?

If you fall behind on a mortgage secured on your home, the lender has the legal right to repossess the property. This is a more serious outcome than defaulting on unsecured debt. Contacting your lender early and seeking free debt advice can help you look at options before a situation becomes critical.

Are there costs involved in remortgaging?

Yes. Common costs include an early repayment charge on your existing deal, a product arrangement fee on the new mortgage, valuation fees, and legal fees. These costs can run to several thousand pounds and need to be included in any comparison.

Sources and further reading

For a broader overview of how mortgages work, see our mortgages guide. For more on consolidating debt without securing it against your property, see our debt consolidation guide.

Common questions
Will remortgaging to pay off debt affect my credit score?

Applying for a remortgage involves a hard credit search, which leaves a short-term mark on your file. If the remortgage goes ahead and you consistently repay on time, that can have a neutral or positive effect over time. Missing mortgage payments, however, is far more damaging than missing unsecured payments.

Can I remortgage if I am already in debt arrears?

Arrears on existing credit make it harder to be accepted for a remortgage. Lenders look closely at your recent repayment history. If you are behind on payments, speaking to a free debt adviser before applying for any new credit is usually a more appropriate first step.

How much equity do I need to remortgage and pay off debt?

Most mortgage lenders require you to keep a minimum loan-to-value ratio, often retaining at least 10–20% equity in the property after the new mortgage. The exact amount depends on the lender and the type of deal available to you.

Is it cheaper to remortgage or take out a personal loan to clear debt?

It depends on your circumstances. A personal loan typically carries a higher interest rate but runs for a shorter term, so you may pay less total interest. A remortgage may offer a lower rate but stretching the debt over many years can increase what you pay overall. Comparing the total amount repayable on both options is a useful starting point.

What happens if I cannot keep up with mortgage payments after remortgaging?

If you fall behind on a mortgage secured on your home, the lender has the legal right to repossess the property. This is a more serious outcome than defaulting on unsecured debt. Contacting your lender early and seeking free debt advice can help you explore options before a situation becomes critical.

Are there costs involved in remortgaging?

Yes. Common costs include an early repayment charge on your existing deal, a product fee on the new mortgage, valuation fees, and legal fees. These costs can reduce or wipe out any short-term saving from a lower rate, so they need to be included in your calculations.

Related guides

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