Increasing mortgage to repay debt

Primmer

We have a Nationwide Mortgage and have over £100k of equity in our property. As a couple we have about £20k of credit card debt, we are paying more than the minimum payments but it is slow to go down. We also ave a loan for £4k which is being repaid as per agreement. Looks like DH is going to be stuck with a tax bill of about £5k to pay which means our debt will be about £30k.

I was thinking about seeing if we could increase our mortgage by about £30k to repay credit cards and loan and to pay the tax bill.

Has anyone here increased their mortgage to clear debt?

National_Debtline

Hello there,

A quick word of warning first, it is seldom advisable to consolidate debts this way, for a few reasons:

The first is that, in effect, you're turning debt which is currently unsecured into debt which is secured. You'll be paying a higher mortgage instalment - which could lead to repossession if you start missing payments due to a change in your circumstances.

As a mortgage is over a long period, typically 20-30 years, you could end up paying back significantly more than the debt in interest.

We often speak to callers that have consolidate their debt only to end up borrowing again on cards and loans - which simply exacerbates the situation. If you do consider consolidating it is absolutely vital that you don't fall in to that trap. I'm certain there are people that have successfully consolidated but it is vital to weigh up all the pros and cons.

If you can meet your minimum payments, overpaying can save you an awful lot of money in interest costs. That said, if you have a priority debt such as tax - you'll need to get an arrangement sorted with HMRC as a matter of urgency as they can be harsh with their enforcement powers.

Do consider working out how much each option will ultimately cost you, that should help you work out which route is the most viable.

Very best wishes,

David @natdebtline

Lensman_2

If you want to move to a life without consumer debt, then only maybe. The justification would be a psychological/morale one.

If not, you will find yourself with another £20k of consumer debt along with a mortgage £30k larger in a few years time.

(I don't mean to be high minded, I speak from personal experience).

eyeopener2

Same here, personal experience says do not do it.

If you cut up your cards, cancel your overdraft and promise not to take a new loan, then fair enough. If not, don't do it.

Primmer

Thank you for your advice I will certainly give it some more thought.

in_need_of_direction

I did it. I added £35k personal debt to my mortgage. I then ran up another £18k on the credit cards, that thanks to a major LBM, I have now cleared. I'm now trying to op my mortgage, slowly so slowly, as otherwise I'll be paying that debt off over more than 20 years. If you are going to do it, try reducing your mortgage term and turn off all other sources of debt. Good luck with your decision.

HappyMJ

Primmer wrote: »

We have a Nationwide Mortgage and have over £100k of equity in our property. As a couple we have about £20k of credit card debt, we are paying more than the minimum payments but it is slow to go down. We also ave a loan for £4k which is being repaid as per agreement. Looks like DH is going to be stuck with a tax bill of about £5k to pay which means our debt will be about £30k.

I was thinking about seeing if we could increase our mortgage by about £30k to repay credit cards and loan and to pay the tax bill.

Has anyone here increased their mortgage to clear debt?

Yes many have tried and succeeded but you seem to have an overspending problem that must be resolved first.

You must get that tax debt paid off that is vitally important they can shut your business down and your source of income will stop.