Remortgaging to pay off debt

When you remortgage, you can either change your plan with the lender you have now or switch to a different mortgage lender. You may want to do this to pay off debt.

Remortgaging can improve your situation in two ways:

• Release equity: This is when you take a lump sum from the value of your property and use it to repay debts
• Reduce your monthly mortgage payment: This frees up money for other debts

Always get expert debt advice before remortgaging to deal with debts.

Unlock your options as a homeowner

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Find out more about how to deal with mortgage arrears, fixed rate ending, how debt can affect your home - and more.

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How remortgaging works

A mortgage lender will base your application on several things including:

• Your credit file
• The value of your house
• How much you want to borrow

Things to consider before remortgaging

Are you behind on payments (in arrears)?

If you are in arrears with your mortgage or any other debts, your credit rating will be affected and it is unlikely you will get a good mortgage offer.

Has your current mortgage deal ended yet?

There is often an early redemption fee if you remortgage early.

This is more commonly known as an exit fee and is a charge that lenders can add when you close your mortgage before the deal has ended.

Will I be able to remortgage if I am in debt?

You can remortgage even if you have debt. What matters most is how well you are keeping up with payments to those debts.

When you miss payments to debts, it affects your credit file. You may find it harder to get a new mortgage with a good rate if your credit file shows you have a poor credit history.

A mortgage broker may be able to help you to find you a good deal.