UK households owed £1.95 trillion in personal debt as of January 2026 — an average of £67,350 per household when mortgages are included. With credit card and consumer borrowing continuing to climb, more homeowners are asking the same question: does it make sense to fold expensive unsecured debt into a mortgage? The honest answer is: sometimes, and it’s worth understanding the trade-offs properly before you do.
How debt consolidation remortgaging works
A debt consolidation remortgage means increasing your mortgage borrowing — either with your current lender or a new one — and using the extra funds to clear other debts such as credit cards, personal loans or overdrafts. Instead of several repayments at different rates, you end up with one monthly mortgage payment.
The appeal is straightforward: mortgage rates are typically far lower than credit card or personal loan rates. Moving £15,000 of credit card debt at 22% APR to a secured rate of around 9% APR over the same term can save several thousand pounds in interest. But the maths only works in your favour if you’re comparing like-for-like terms — and this is where consolidation remortgages can quietly cost more than they save.
The catch: total cost vs monthly cost
Stretching debt over a mortgage term of 20 or 25 years dramatically lowers the monthly payment, but it also means paying interest on that debt for far longer. A £15,000 balance consolidated at a lower rate over 5 years might cost roughly £3,700 in interest — but stretch the same amount over 15 years and the total interest bill can rise to something closer to £12,400, even at the lower rate. Lower monthly payments and higher total cost can both be true at the same time, and it’s the single most important thing to check before committing.
What lenders allow in 2026
Most mainstream UK lenders cap debt consolidation remortgages at 80% loan-to-value, with a small number of high-street lenders stretching to 85% on stronger applications and some specialist lenders reaching 90% for clean-credit files. It’s worth knowing that your effective LTV often ends up higher than expected once you factor in the consolidation amount itself, any early repayment charge being added to the loan, and product or broker fees — homeowners are frequently a couple of percentage points closer to the next lending band than they think.
Remortgage vs second charge: which route?
There are two main ways to release equity for consolidation, and the right one depends on your existing mortgage deal:
- Full remortgage — replaces your entire mortgage with a new, larger one. Usually the cheaper route if your current deal has ended or has no exit penalty, since you’re borrowing the whole amount at one (hopefully competitive) rate.
- Second charge mortgage — sits alongside your existing mortgage rather than replacing it. This is often the better option if you’re mid-way through a competitive fixed rate and would face a significant early repayment charge by remortgaging in full, since your original deal stays untouched.
The second charge market has actually seen renewed growth in 2026 — data from the Finance & Leasing Association shows the sector hit its highest lending levels since 2008 in March, with a significant share of that borrowing used for debt consolidation alongside home improvements.
Why timing matters more than usual right now
Around 1.6–1.8 million UK fixed-rate mortgage deals are expiring during 2026, many of them taken out at rock-bottom pandemic-era rates of 1.5–2%. Homeowners rolling off those deals are often facing renewal rates two to three times higher, and for many, this is precisely the moment consolidation gets considered — the new mortgage payment is already changing, so folding other debts in at the same time can feel like the practical option. If this applies to you, it’s worth reviewing consolidation and your rate renewal together rather than as two separate decisions, since doing both through a broker in one process can uncover better combined outcomes than tackling them separately.
Before you consolidate: a quick checklist
- List every debt with its balance, rate, and any early repayment penalties — you need the full picture before comparing options
- Check what your true post-fees LTV will be, not just your current one
- Compare the total amount repayable on the new mortgage term against leaving debts as they are
- Consider whether a shorter mortgage term could keep total costs down, even if it means a higher monthly payment than the longest term on offer
- Be honest about whether the spending pattern that created the debt has actually changed — consolidating debt you go on to rebuild leaves you worse off, not better
Free, independent debt advice
If you’re feeling overwhelmed rather than simply looking to restructure, free and impartial debt advice is available from MoneyHelper and StepChange before considering any borrowing decision.
Speak to a north Norfolk mortgage broker
Debt consolidation isn’t right for everyone, and getting the structure wrong can cost more than it saves. At Emily’s Mortgage Services, I’ll talk through your full financial picture — including remortgage vs second charge options — and give you a clear, honest recommendation, not just the cheapest headline rate.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
FAQs
Does consolidating debt into my mortgage hurt my credit score? Applying triggers a credit check like any borrowing application, but successfully consolidating and maintaining one manageable payment can improve your credit profile over time compared with juggling multiple debts.
Is a second charge mortgage more expensive than remortgaging? Rates on second charge lending are typically a little higher than a full remortgage, but if remortgaging means losing a favourable existing rate or paying a large early repayment charge, a second charge can still work out cheaper overall.
What’s the maximum I can borrow for debt consolidation? This depends on your available equity and the lender’s LTV limits — typically up to 80% LTV on mainstream deals, occasionally higher with specialist lenders on strong applications.
Should I consolidate credit cards or leave them as they are? It depends on the rate difference, how long you’d take to clear them anyway, and whether stretching the term increases total cost more than it reduces monthly pressure. This is exactly the kind of comparison worth doing with a broker before deciding.
