Remortgaging to pay off debt

A remortgage is when you trade the mortgage you have now for a new of different one. You may want to do this to pay off debt.

Remortgaging can mean:

• Changing plans with the lender you have now
• Switching to another mortgage lender completely

Remortgaging can improve your situation in two ways:

• Release equity

Take a lump sum from the value of your property

Use this 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.

How remortgaging works

A mortgage lender will base your application on a number of things including:

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

Important Information

If you are in arrears with your mortgage or any other debts:

• Your credit rating will be affected
• It is unlikely you will get a good mortgage offer

If your current mortgage deal that has not ended:

• There is often 'an early redemption fee' if you remortgage early
• For example:
• Last year, you got a fixed term mortgage for three years
• You pay extra to remortgage this year

Will I be able to remortgage if I'm in debt?

Being in debt means you probably missed payments. That affects your credit file.

You may find it hard to get a new mortgage with a good rate.

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