Can & Should You redo house payments To Pay Off Debts?

Written by Mathew McCorry

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For those of you who don’t know, redoing house payments is when you replace your existing house repayments with a new one, which can be through changing to another lender or staying with your lender but switching the product. redoing house payments is pretty common place, house repayments companies often offer introductory rates for the first few years after switching to them, so it can be beneficial to switch regularly.

There are however other reasons that you may look to remortage and that is to release equity from your property to pay other debts, but is that the right thing to do?

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How redoing house payments To Pay Off Debts Works

It’s quite simple. The process is similar to your standard redoing house payments process, you select a product from either your house repayments lender or another & you have to go through their process. Where it differs is when you come to consolidating the debts. Say for instance you currently had these loans to pay:

  • house repayments - £100,000
  • Credit Card - £2,000
  • Personal Loan - £5,000
  • Car Loan - £15,000


You would look to redoing house payments to cover the total amount, for £122,000, which you would then use the excess amount to pay off the other loans in full.

This method depends upon the LTV (Loan To Value) of your property. Using the above example if your property was worth £120,000, you are very unlikely to get a lender that will allow you to do this, because the loan exceed the value. You typically can only lend 90% of the properties LTV, so in this scenario your property would have to be valued at £134,200, at the least.

Is It The Right Choice For You?

Currently the interest rate on house repayments is relatively low, so it may be particularly tempting to consolidate your debt using the equity in your property as you’ll often find that your credit card & any other loan will have a higher interest rate.

It’s an option, but it’s not a quick process. redoing house payments can take time, the lender will also look into the value of your property and take into account your credit rating. If you are consolidating dates based on struggling to meet payments or even missing them then it could make redoing house payments tricky. If your credit rating is poor you may still be able to redoing house payments but it will often be reflected by a higher interest rate for the lender taking the risk. This is something to consider as it may make the whole process more costly.

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Things To Consider Before Going Ahead

It isn’t always the best idea, it will mean that the amount you are loaning is larger and you may be tempted to spread the payments by extending the term, but as an overall this could cost you significantly more. redoing house payments may seem a good option because it offers a quick solution to reduce your debts, but it’s always worth thinking about the end result. Making the changes to your house repayments could mean that you pay considerably more overall.

We aren’t financial experts, if you find yourself in debt and struggling to cope then you should visit a financial expert to see what your options are. Alternatively, there are options out there such as the Citizen Advice Bureau who will provide advice and help for your particular situation.

What Are Your Alternative Options?

If you are considering redoing house payments there could be a few alternative options that are better suited to your situation, here are a few:

  • Downsize
  • If your debts are considerable you may want to consider downsizing your home in order to take some of the equity to pay off the debt. This isn’t always an easy solution and can take a fair amount of time.

  • Personal loan
  • Recently personal loans have got very competitive in terms of interest rates, you can even get some that are below 3%. Although it sounds counter-productive you may want to see if you can get a personal loan with a good interest rate, stretch the payment over a longer period of time and consolidate all your debts into the one. This can make it easier to manage, but you will likely need to have a good credit rating to do this.

  • Seek financial advice
  • As previously mentioned, the best thing to do is to seek advice from a financial expert or from Citizens Advice. They will look at your current situation & take everything into account in order to provide you with the best feasible option.

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