Debt consolidation remortgage:Top 10 signs it could be risky (and what to do next)

The 10 warning signs a debt consolidation remortgage could be risky for you

1) You’re turning most of your debts into borrowing secured on your home

Consolidating with your mortgage usually means you’re moving unsecured debts into secured borrowing. If repayments become unaffordable, you’re putting your home at risk.

Example: If you fail to pay a credit card bill, you might get a County Court Judgment (CCJ). If you fail to pay your mortgage, the lender could repossess your home.

2) The “saving” only exists because the term is much longer

Yes, mortgages often have lower rates, but spreading debt over a longer period can mean you pay far more overall even if the monthly payment looks better.

Example: A £10,000 loan at 15% over 5 years costs about £4,000 in interest. The same debt at 5% over 25 years costs roughly £7,500 in interest.

3) You’ll be paying early repayment charges (ERCs) and chunky fees

ERCs, arrangement fees, legal/valuation/admin costs can wipe out the benefit, and if fees are added to the mortgage, you may pay interest on them too. MoneyHelper flags checking charges and ERCs as part of deciding whether remortgaging is worthwhile.

Example: If you save £50 a month but pay a £1,500 arrangement fee to get the deal, it takes 30 months just to break even on the fee.

4) You’re close to negative equity or your loan-to-value (LTV) is high

If your LTV is high, your rate choices can be limited. MoneyHelper notes that a drop in property value can increase LTV and negative equity causes problems when remortgaging.

Example: If you owe £180,000 on a £200,000 home (90% LTV) and add £10,000 debt, you hit 95% LTV, where mortgage interest rates are often much higher.

5) Your income isn’t stable (or a big change is coming)

If you’re self-employed, on variable hours/commission, changing jobs, or expecting a household income change, a bigger secured commitment can be fragile, especially if affordability is tight.

Example: If you rely on commission to cover a higher mortgage payment and your sales drop for three months, you could fall into arrears.

6) You’d struggle if rates rise

The FCA’s mortgage stress-test rule requires lenders to consider the impact of likely future rate rises on affordability (with key exceptions).

Example: You might afford the payment at 4% interest, but if your deal ends and rates jump to 6%, your monthly cost could rise by hundreds of pounds.

7) You’re consolidating because you feel under pressure

If the plan is “I have to do this or everything collapses,” that’s a sign you may need debt advice first (and possibly a different solution).

Example: If you are borrowing just to pay other household bills rather than to clear a specific legacy debt, consolidation might only offer temporary relief.

8) Your debts are actually repayable within a short time without securing them

The Financial Ombudsman has upheld complaints where people consolidated relatively small/short-term debts into a longer mortgage term and the costs outweighed the benefits.

Example: Securing a £3,000 overdraft that you could clear in a year with discipline means you’ll likely pay interest on that £3,000 for 25 years instead.

9) You haven’t tackled the root cause (so the debt may come back)

If spending patterns, budgeting gaps, or reliance on credit aren’t addressed, consolidation can turn into “clear the cards… then rebuild the cards.”

Example: You use a remortgage to pay off credit cards but don’t cancel the cards. Two years later, you have maxed out the cards again plus a bigger mortgage.

10) Someone is pushing a “guaranteed approval” or “one-size-fits-all” solution

Debt + mortgages are personal. If you’re being rushed, pressured, or promised certainty, step back.

Example: A reputable adviser will explain the risks (like total cost). A bad actor might simply say “Sign this to get cash today” without checking if it’s right for you.

A simple next step that protects you (and saves time)

If you’re still considering a debt consolidation remortgage, you’ll usually want three things before applying:

• Affordability reality-check (now + if rates rise)
• Total cost comparison (monthly payment and total repayable)
• Risk check (unsecured vs secured + what happens if life changes)

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