This calculator is an estimation of how much you could borrow. If you’re ready to take out a mortgage, speak to a Revolution brokers to see what options are available.
Business finance broker often manages enquiries where clients are considering remortgaging their property to assist with consolidating other debts.
Let's look at why debt consolidation through a mortgage can be a great option, help you pay back your debts over a manageable timeframe, and reduce your overall interest costs.
For personal advice and support with your remortgaging application, contact the Revolution team on 0330 304 3040 or drop us a message at info@revolutionbrokers.co.uk.
Consolidating debts is where you take out one, larger loan, and use that to pay back smaller debts.
By taking out a mortgage, or a remortgage, the equity in your property helps act as security against the lending, often achieving much lower interest rates than you would have been offered elsewhere.
Benefits of debt consolidation mortgages include:
Whether you have a mortgage-free property and are looking to take out a loan against it to consolidate your debts, or want to remortgage your property to cover the lending you need, we'll refer to the loan as a mortgage for the purposes of this article since the same factors are essential in both situations.
Applying for a debt consolidation mortgage is, in essence, the same as taking out any other kind of mortgage. The process will include:
Many mortgage lenders extending an offer for debt consolidation will ask for a formal document to be signed, which commits you to use the lending to repay your debts.
This means that they can safely regard existing debts on your credit file as no longer being a factor when the mortgage repayments begin.
If you have an excellent interest rate on an existing mortgage and don't want to lose that if current lending rates are higher, you can sometimes take out a second, smaller mortgage without impacting the first one.
That is called a second charge mortgage and means that you have two mortgages, at two different rates, which is always possible if you have sufficient equity in your property.
Unsecured debt almost always carried a higher interest rate because the lender doesn't have the security of a property to lower their risk exposure.
The type of debts that are usually cheaper to consolidate through a mortgage include things like:
As an example, let's say you have a current debt of:
In total, your debt comes to £22,500, and over the next ten years, you will pay interest of £23,423 (if not repaid sooner) - making the repayment of £22,500 debt an enormous £45,923.
If you decided to take out a ten-year debt consolidation mortgage to repay the £22,500 at an interest rate of 5%, you would repay the debt in the same amount of time, with total repayments slashed from £45,923 to £28,638 - reducing the interest by over £17,000.
Before taking out lending secured against your home, you are invited to contact Revolution Finance on 0330 304 3040, so we can discuss the best mortgage options for you.
In some cases, consolidating your debts through a mortgage might not be in your best interests - for example:
For many people, the pros far outweigh the cons:
If you are unsure about whether debt consolidation mortgages are the answer to your debt concerns, give us a call, and we'll run through your best options.
Things to bear in mind are:
The size of mortgage you can get, depends on lots of criteria, and the individual lender. For example:
For example, if you have a property with 100% equity, i.e. no mortgage outstanding, a lender might offer you up to a 90% loan-to-value ratio - 90% of the value of the property.
Some lenders will place a limit on how much you can borrow against your home for debt consolidation purposes - often a fixed limitation of, say, £30,000 or £50,000.
In other cases, the lending offer might depend on what debts you have, and the circumstances around them rather than the value of the property itself.
If you already have a mortgage, and decide to remortgage to pay off debts, then your existing mortgage is also paid off, and replaced by your new borrowing.
However, a second charge mortgage is a type of secured loan, typically from a different lender than your existing mortgage, which is a second lending facility secured against your property.
That means you have two loan accounts; your primary mortgage and your second mortgage.
Second charge loans are sometimes an excellent option for homeowners who have an attractive rate on their existing mortgage and don't wish to lose this by remortgaging at today's market rates.
As with any type of mortgage, the terms under which you can borrow depend on the lender, and there is no reason you can't consolidate debts through a mortgage whether you are retired or not.
Lenders will need to know your age, income, and the amount already borrowed against the property before making an offer.
Some lenders put a limit on lending to older applicants of, say, £10,000, whereas others will not restrict their borrowing at all.
Many mortgage providers do have age limits, but it all depends on the duration of the loan term and knowing which specialist lenders to apply to. Some have caps of age 75 or 85, and others have no restrictions whatsoever.
For support with securing mortgage lending for debt consolidation past retirement, give the Revolution team a call, and we will recommend the best products for your requirements.
Lots of mortgage lenders offer specific debt consolidation mortgages, although the criteria they have will vary significantly between providers. Many mainstream lenders offer debt consolidation lending, including:
However, you can often secure more competitive rates from niche lenders who negotiate products directly with brokers that are not available on the open market.
Revolution Brokers works with a vast network of lenders and providers, and as an independent broker has access to the entire market.
This means that we can source specific lending that is suited to your needs, liaise with lenders who offer specialist products outside of the open market and negotiate the most advantageous terms on your behalf.
For tailored support with consolidating debts through mortgage lending, get in touch at info@revolutionbrokers.co.uk or give us a call at 0330 304 3040.
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The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature. We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.
Revolution Brokers understands that mortgages can be complex and confusing!
Ask us any question you might have, and one of our skilled consultants will come back to you as quickly as possible.
