Managing multiple debts can feel overwhelming — especially when interest rates are high and monthly payments are hard to juggle. One solution that may help is mortgage debt consolidation, where you use the equity in your home to pay off other debts and simplify your finances.
At Friends Capital Ltd, we help homeowners across the UK assess whether mortgage debt consolidation is the right move, and how to do it in the most cost-effective and responsible way. This guide explains how the process works, what to consider, and how to get expert advice before making any decisions.
Mortgage debt consolidation involves combining multiple debts — such as credit cards, personal loans, and car finance — into your mortgage. This is usually done by:
The goal is to reduce your monthly outgoings by moving high-interest unsecured debts into a single, lower-interest mortgage repayment.
Here’s how mortgage debt consolidation typically works:
This can simplify your financial situation and potentially save money on interest, depending on the terms of your new mortgage and the debts you’re consolidating.
Mortgage debt consolidation can be effective, but it’s not without risks. It’s essential to consider the following:
This is why professional advice is crucial. Our mortgage advisers will help you weigh up the costs and benefits based on your personal situation.
You replace your current mortgage with a new one, borrowing more than you owe, and use the surplus to repay debts. This works best when you have a good credit rating and favourable equity.
Also known as a secured loan, this is a separate loan secured against your property. It’s ideal if you don’t want to disturb your existing mortgage — especially if you're on a low fixed rate or have early repayment charges.
Some mortgage lenders offer a further advance — an additional loan on top of your existing mortgage — which can also be used for debt consolidation.
Yes, by remortgaging or taking out a secured loan, you can use the equity in your home to repay unsecured debts.
It can be, if it reduces your interest rates and helps you manage repayments — but it must be carefully assessed. You’re increasing your mortgage balance and securing debts against your home.
Initially, your credit score may dip due to new credit activity, but over time, reducing your debt and making regular payments can improve it.
Yes, some lenders specialise in helping those with adverse credit. A broker can help match you with the right lender and product.
Consolidating your debts through your mortgage can be a smart move — but only if it’s done correctly and with a full understanding of the risks and benefits.
At Friends Capital Ltd, our expert mortgage advisers are here to help you:
Get in touch with us today to speak to a friendly, experienced adviser and start taking control of your finances with confidence.