Ongoing story of debt consolidation with poor credit in 2018, followed by a remortgage in 2021

Overview

This case study follows a couple who wanted to take control of their monthly outgoings by consolidating multiple debts into their mortgage. Their situation included a poor credit marker from 2015, and they later remortgaged in 2018 and reviewed their mortgage again in 2021.

While every borrower’s circumstances are different, the story highlights how credit history, affordability, and the structure of borrowing can affect what’s possible over time.

Client situation in 2018

In 2018, the couple (both in their mid-40s) approached a mortgage broker to review their existing mortgage and wider credit commitments.

Employment and income: Both were employed by the NHS, with a combined income of £38,000.
Family circumstances: They had two children.
Property: A home in Middleton valued at £95,000.
Existing mortgage: A repayment mortgage with £37,000 outstanding and 10 years remaining.
Mortgage cost: They were paying £531 per month.

Alongside the mortgage, they had significant unsecured debt:

Loans and credit cards: Total outstanding of £33,000.
Unsecured repayments: £478 per month.
Total monthly outgoings (mortgage + unsecured): £1,009 per month.

Their overall debt picture was therefore around £70,000, and they were aiming to reduce their monthly outgoings to around £500 per month.

Credit history factor

One applicant had a default registered for over £7,000 in May 2015.

Importantly, the couple’s payments were up to date at the time of review—however, the presence of a default can still affect lender decisions, particularly when unsecured borrowing is being consolidated.

The challenge

Although the couple were meeting repayments, the unsecured debts were not meaningfully reducing. The credit card balances were largely being serviced through interest, with little capital repayment.

That created a recurring pattern where salaries were credited to their bank account and then quickly absorbed by debt repayments and day-to-day living costs. The result was a household budget that felt like it left little room for family spending.

They also considered taking out a new unsecured personal loan, but the likely repayment term (up to around seven years) would not fit their target monthly budget.

What they wanted to achieve

Their goal was twofold:

Consolidate the existing mortgage and unsecured debts into one monthly payment.
Improve affordability by reducing the monthly outgoings to a manageable level.

To make the monthly figure work, they were open to extending the mortgage term.

The 2018 solution: remortgage to consolidate debts

In 2018, the remortgage plan was designed to roll the existing mortgage and unsecured borrowing into a single mortgage commitment.

Consolidation structure

They remortgaged to a new lender and increased the mortgage to £70,000, intended to cover:

Repayment of the existing mortgage balance
Repayment of loans and credit card balances

This approach shifted the debts from unsecured borrowing to a secured mortgage repayment plan.

Affordability through term extension

To reach the desired monthly payment, the mortgage term was extended to 20 years.

Outcome

With the new structure in place, their monthly outgoings reduced to £482 per month.

Beyond the number itself, the key practical benefit was that they moved from managing multiple repayments to one mortgage payment, making it easier to track progress and budget each month.

Important considerations and risks (2018)

This case study also illustrates why debt consolidation via a mortgage needs careful thought.

When unsecured debts (such as credit cards) are moved onto a secured basis:

The total cost of credit can increase over the longer term, even if monthly payments reduce.
The risk profile changes, because the secured repayment commitment is tied to the property.

The couple were made aware of these implications before proceeding.

Update in 2021: capital raise for home improvements

Before the 2018 fixed period ended, the couple reviewed their mortgage again in 2021.

By this point:

The earlier default from 2015 no longer appeared on their credit report.
They had maintained clear control of their finances.

New objective

They wanted to borrow additional funds to improve the property, including work such as:

a new kitchen
a new bathroom
a new front door
improvements to the drive

Property and borrowing details

Property value: £130,000
Mortgage balance at the time: £65,000
Capital raise target: £30,000
Total borrowing sought: £95,000
Term: borrowing structured over the remaining 17 years

The 2021 remortgage outcome

With the default no longer present and the couple’s credit profile improved, they were able to remortgage to a high street lender.

They remortgaged on a 2-year fixed rate. Their new mortgage payment was £528 per month.

While this was slightly higher than the 2018 consolidated payment, it reflected the additional borrowing for home improvements and the term remaining at that stage.

What this case study shows

This ongoing story demonstrates several themes that often matter in remortgage decisions:

Debt consolidation can improve day-to-day affordability when monthly outgoings are the main pressure point.
Credit history is not static—a marker that affects options at one point may change lender availability later.
Extending the term can reduce monthly payments, but it can also affect the overall cost and risk profile.
A remortgage can be reviewed again when circumstances change, including when there’s a need for additional borrowing for property improvements.

Conclusion

From 2018 to 2021, this couple used remortgaging first to consolidate debts and then to raise capital for home improvements. Their journey underlines how affordability targets, credit history, and mortgage structure can evolve over time—supporting a plan that fits both financial pressures and longer-term goals.

Case studies are based on individual circumstances and outcomes will vary. This page does not guarantee that any similar outcome is available to other borrowers.