Remortgaging to consolidate debt means borrowing more against your home and using the money to clear credit cards, loans or car finance. It can reduce your monthly outgoings substantially, sometimes dramatically. It can also cost you a great deal more overall, and it turns debt that was unsecured into debt secured against your home. Whether it is the right move depends on your circumstances and on which lender you approach, because lender rules in this area vary more than in almost any other part of the mortgage market.
Key takeaway: Two things decide whether this works. The first is how much you can borrow, which most lenders cap between 80% and 85% of your property's value for debt consolidation. The second is whether the lender will ignore the debts you are repaying when they assess affordability. Some do, some do not, and that single difference can be what separates an approval from a decline.
[[stats: 80-85% = The maximum LTV most mainstream lenders allow for debt consolidation | Not all = Lenders ignore the debts you are clearing when assessing affordability | 2 routes = A further advance with your lender, or a full remortgage]]
What does remortgaging to consolidate debt actually mean?
You take a new, larger mortgage. Part of it repays your existing mortgage, and the rest is released to you to pay off other debts. Your credit cards and loans disappear, and what is left is a single, larger mortgage payment.
The appeal is obvious. Mortgage rates are typically lower than credit card and personal loan rates, and mortgage terms are much longer, so the monthly cost of the same debt falls considerably. For a household under real monthly pressure, that breathing room can be genuinely valuable.
The catch is equally real, and we will come to it below. First, the practical question of how it is done.
The two ways to consolidate debt into your mortgage
There are two routes, and they are meaningfully different. Which one suits you depends on your existing lender's appetite, your equity, and how much you value simplicity later on.
[[flowcompare: Further advance|Stay with your lender|Apply to your existing lender;Their criteria decides;Funds released|No ERCs, no solicitor, usually quicker ;; Remortgage|Move to a new lender|Compare the whole market;Full application;Legal process;Funds released|Whole of market, one single mortgage]]
A further advance with your existing lender
You borrow additional money from the lender you are already with, on top of your existing mortgage. Because you are not moving lender, you avoid any early repayment charges that would apply to leaving your current deal, there is no legal process, and it is generally quicker.
The drawbacks are worth understanding. You are entirely at the mercy of your existing lender's debt consolidation policy, and as the table below shows, those policies differ enormously. If your lender caps consolidation at 80% of the property's value and you need 84%, that is the end of the conversation. You also end up with two separate sub-accounts: two mortgage balances, potentially on different rates, with different end dates. That means two products to review and renew every few years rather than one, which is more admin than most people want.
A remortgage to a new lender
You move the whole mortgage, including the additional borrowing, to a new lender. This opens up the entire market, so you can look for a better interest rate and, importantly, find a lender whose debt consolidation and affordability rules actually fit your situation.
A solicitor is required whenever you change lender, which adds time and a modest cost. Our remortgage guide walks through that process, and our guide to product transfer versus remortgage covers the timing considerations. The advantage is that you end up with everything on a single mortgage scheme, so there is only one product to review at the end of the deal rather than two.
How much can you borrow? The LTV limits
Almost every lender applies a lower maximum loan to value for debt consolidation than for ordinary borrowing. Where they might lend to 90% or 95% on a straightforward remortgage, most cap consolidation between 75% and 85%.
This is usually the first hurdle. If you have limited equity, the amount of debt you can realistically move onto the mortgage may be smaller than you hoped, regardless of affordability.
How lenders treat debts you are repaying
This is the part that catches people out, and it is the single most important thing on this page.
When you consolidate, you are telling the lender that the credit cards and loans showing on your credit file are about to be cleared with the money they are lending you. The logical thing would be for the lender to disregard those payments when working out what you can afford. A good number of lenders do exactly that. Others do not.
Santander and HSBC will include your existing credit commitments in the affordability assessment whether or not they are being repaid with the new borrowing. Halifax will ignore debts being repaid, but only up to 85% loan to value, and will factor them back in above that. NatWest and Barclays will generally disregard debts the borrower has committed to clearing on completion. For someone carrying significant debt, that difference decides whether the application works at all.
[[table: Lender | Max LTV | Debts ignored if repaid | Max debt to income | Notes ;; Halifax | 85% | Yes | No set ratio | Condition added to ensure debts cleared on completion ;; NatWest | 80% | Yes | No set ratio | Debts under 6 months to run can be excluded ;; Barclays | 80% | Usually | 99% of gross income | Not available on interest only ;; HSBC | 80% | No | 50% | Max £50,000; 60% LTV if any interest only ;; Santander | 85% | No | Not published | Max £50,000 consolidation loan part ;; TSB | 85% | Yes | 100% | Consolidation capped at 20% of property value ;; Skipton | Existing customers only | Yes | No max | Not accepted on remortgage applications ;; Accord | 85% | Yes | No set ratio | Maximum maturity age 70 ;; Newcastle | 80% | Yes | No max | Partial repayment leaves the balance counted ;; Precise | 90% | Yes | No max | Conveyancer must redeem debts if credit impaired ;; Pepper Money | 85% | Yes | No max | No credit scoring; LTV depends on product tier ;; Aldermore | 85% | Yes, unless credit impaired | No set ratio | 75% LTV on interest only; all debts count if credit impaired]]
Lender criteria correct as at 22 August 2026, and summarised from a criteria search rather than reproduced in full. Individual policies contain further conditions, so please treat this as a guide and speak to an adviser about your own case.
Debt to income ratios, and why timing matters
There is a second, less obvious hurdle. Even where a lender will ignore the debts once they are repaid, the credit check and the initial assessment happen at the point of application, while every one of those balances is still sitting on your credit file.
Many lenders apply a maximum debt to income ratio, comparing your total unsecured debt against your gross annual income, and will decline an application that breaches it. Barclays declines where total unsecured debt equals or exceeds gross annual income. HSBC works to 50%. TSB declines where unsecured commitments exceed 100% of gross annual income, and applies further tests on how recently balances have grown.
The practical consequence is uncomfortable but important: the more indebted you are, the more likely it is that the lenders best placed to help are the ones who will decline you at the first hurdle. It is precisely the situation where knowing which lender to approach first, rather than applying and hoping, makes a real difference.
Good to know: Several lenders also set a maximum on how much of the loan can be debt consolidation, expressed either as a cash figure or as a proportion of the property value. TSB caps it at 20% of the property value, Santander and HSBC at £50,000. These limits sit alongside the LTV cap rather than replacing it.
What if I have bad credit or am behind on my payments?
There may well still be an option, depending on your overall situation and your credit score. Missed payments, defaults or a county court judgment do not automatically rule out consolidation. It is also worth knowing that what feels like a serious credit problem to you is sometimes viewed as relatively mild by a lender, so it is rarely worth ruling yourself out before someone has looked properly.
Specialist lenders including Precise, Pepper Money and Aldermore consider debt consolidation for applicants with adverse credit, and some will go to a higher loan to value than the mainstream banks. Pepper Money does not credit score at all. The trade-off is usually the interest rate, and the criteria differ in ways that matter: Aldermore, for example, includes every existing commitment in the affordability calculation for a credit-impaired applicant whether or not it is being repaid, which is the opposite of how it treats everyone else.
If you are currently behind on payments rather than carrying historic issues, be realistic that active arrears narrow the options considerably, and in some cases free debt advice will serve you better than additional borrowing. Our guide on mortgages with adverse credit covers where lenders draw their lines in far more detail, and a mortgage broker at Quanstrom Financial can tell you quickly whether there is a realistic route for your circumstances.
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The bigger risk: a lower rate can still cost you more
This is the point we make to every client considering consolidation, and it is the one that surprises people most.
Moving a debt from a higher rate to a lower one sounds like it must save money. It usually does not, because you are also stretching the repayment period from a few years to the whole remaining term of your mortgage. Interest is charged for far longer, and that generally outweighs the lower rate by a wide margin.
Example: A £12,500 loan at 7% with three years left costs around £386 a month, and roughly £1,395 in interest over those three years. Move the same £12,500 onto a mortgage at 4.5% with 25 years remaining and it costs around £69 a month, but around £8,344 in interest across the term. The monthly payment falls by roughly £316, and the total cost rises by nearly £7,000.
Try it with your own figures below. Change the years remaining on your mortgage in particular, because that is what drives the difference.
[[calc:debtcon]]
None of this makes consolidation wrong. Plenty of people take that trade knowingly, because monthly affordability is the pressing problem and total interest over 25 years is not. That is a perfectly reasonable decision, provided it is made with the figures in front of you rather than on the assumption that a lower rate automatically means a lower cost.
There is also a middle path worth raising with your adviser: overpaying the mortgage once the pressure eases, or arranging the additional borrowing over a shorter term where the lender permits it, so the debt is not stretched across the full remaining term.
Securing previously unsecured debt against your home
Credit cards, personal loans, overdrafts and most car finance are unsecured. If you fell badly behind on them, the consequences would be serious, but your home would not be directly at stake.
Move those balances onto your mortgage and that changes. The debt becomes secured against your property, and your home is the security for it. That is a genuine change in the nature of the risk you are carrying, and it deserves to be weighed properly rather than treated as a technicality.
It is also worth being honest about the pattern that sometimes follows. Consolidation clears the credit cards, but it does not clear the habits or circumstances that built the balances. If the cards are used again, a household can end up with the same unsecured debt as before, plus a larger mortgage. If that risk feels real to you, free debt advice from an organisation such as StepChange or Citizens Advice may be a better first step than borrowing more.
When might consolidation still be the right decision?
Plenty of the time, it is a sound and sensible move. These are the situations where it tends to make most sense.
[[accordion: The monthly payments are genuinely unaffordable|If you are struggling to meet your commitments each month, reducing the outgoings has real value now, and that can matter more than the total cost over twenty-five years. Getting a household back to a sustainable monthly position is a legitimate objective in its own right. ;; The debts are large and expensive|Consolidating a substantial balance sitting on a high credit card rate produces a much bigger benefit than moving a small, cheap debt. The higher the rate you are moving away from, and the shorter the mortgage term remaining, the better the arithmetic looks. ;; You have plenty of equity|If the new borrowing keeps you comfortably within a lender's LTV limits, you have far more choice of lender and are likely to get a better rate. Consolidation works far better as an option when you are not scraping against the ceiling. ;; You can overpay later|If your income is likely to improve, or the pressure is temporary, consolidating now and overpaying the mortgage later can give you the monthly relief without the full long-term interest cost. Check your lender's overpayment allowance before relying on this. ;; You are already remortgaging anyway|If your deal is ending and you are moving lender regardless, folding consolidation into that remortgage avoids paying for a separate process. Our guide on product transfer versus remortgage covers the timing.]]
Where to start
The most useful first step is not an application. It is working out which lenders would actually consider your situation, given your equity, your total unsecured debt against your income, and whether the debts you are clearing would be disregarded.
That is a whole of market question, and it is the reason this particular topic is worth taking advice on rather than approaching your own bank and hoping. A mortgage broker at Quanstrom Financial can look at the figures, tell you honestly whether consolidation would leave you better off, and place the case with a lender whose rules fit rather than one that will decline at the credit check.
Frequently asked questions
Can you remortgage to pay off debt?
Yes, subject to your lender's criteria. You borrow more against your home and use the additional funds to clear credit cards, loans or other commitments. Most lenders cap the borrowing at somewhere between 75% and 85% of your property's value when the purpose is debt consolidation, which is lower than they would allow on an ordinary remortgage.
How much can you borrow to consolidate debt?
It depends on your equity, your affordability and the individual lender. Most mainstream lenders cap debt consolidation at 80% or 85% loan to value, and several also limit how much of the loan can be consolidation, either as a cash figure or as a proportion of the property value.
Do lenders ignore the debts you are paying off?
Some do and some do not, and it is one of the biggest differences between lenders. Santander and HSBC include existing commitments in affordability whether or not they are being repaid, while NatWest and Barclays will generally disregard debts the borrower has committed to clearing on completion. Halifax ignores them up to 85% loan to value but factors them back in above that.
What is a debt to income ratio, and why does it matter?
It compares your total unsecured debt against your gross annual income, and many lenders use it as a pass or fail test. It matters because the assessment happens at application, while the debts are still on your credit file, so a heavily indebted applicant can be declined before the consolidation has a chance to help. Barclays declines where unsecured debt equals or exceeds gross annual income, and HSBC works to 50%.
Is a further advance or a remortgage better for debt consolidation?
Neither is automatically better. A further advance keeps you with your current lender, avoids early repayment charges and the legal process, and is usually quicker, but you are limited to that lender's policy and end up with two mortgage accounts. A remortgage opens the whole market and leaves you with a single mortgage, but requires a solicitor and a full application.
Does consolidating debt into a mortgage cost more overall?
Very often, yes, even at a lower interest rate, because the debt is spread over a much longer period. A £12,500 loan at 7% with three years to run costs around £1,395 in interest, whereas the same amount added to a mortgage at 4.5% over 25 years costs around £8,344. The monthly payment falls considerably, but the total cost rises.
Will consolidating debt affect my credit score?
Clearing credit cards and loans generally has a positive effect over time, since your unsecured balances reduce. The application itself involves a credit search, which is recorded. The bigger risk to your credit position is running the cleared balances back up, which leaves you with both the old debt and a larger mortgage.
Can I consolidate debt if I have bad credit or am behind on payments?
There may still be an option, depending on your overall situation and your credit score. Specialist lenders including Precise, Pepper Money and Aldermore consider debt consolidation for applicants with adverse credit, and Pepper Money does not credit score at all, though rates are usually higher. Active arrears narrow the options considerably, so it is worth taking advice early rather than assuming either that you will be fine or that you have no chance.
Does consolidating put my home at risk?
It changes the nature of the debt. Credit cards and personal loans are unsecured, whereas a mortgage is secured against your property, so moving those balances onto the mortgage means your home becomes the security for them. That is a genuine consideration and worth weighing carefully before proceeding.
Do I need life insurance to get a mortgage?
No, life insurance is not a legal requirement and lenders do not generally insist on it, although buildings insurance is required. Quanstrom Financial strongly recommends life cover to anyone whose family depends on their income, because a mortgage becomes a debt of your estate if the worst happens. Our guide on whether you need life insurance for a mortgage explains what is genuinely required and what is worth considering.
Written by Toby Quanstrom CeMAP, Director at Quanstrom Financial, a whole of market mortgage broker based in Eastbourne, East Sussex.
This article is for general information only and does not constitute advice. Think carefully before securing other debts against your home. Consolidating existing borrowing into a mortgage may reduce your monthly payments but increase the total amount you repay, and previously unsecured debts become secured against your property. Please speak to an adviser about your own circumstances before making a decision.
Your home may be repossessed if you do not keep up repayments on your mortgage.
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