Using equity for debt consolidation

daverave7

I'm looking into options on how to reduce my current credit card balances.  My total balance is currently around 50 % of my annual salary, which I'm uncomfortable with and I think might affect my chances of future 0 % balance transfer offers. (Admittedly, I've been using 0 % balance transfers for many years).

I currently have a HSBC mortgage (£150K owing with £12K homeowner loan, all at 1.04 %), and my property is valued at £380K. Can I access the equity to pay off my credit cards, providing I don't go over the 60% LTV in my current agreement? What rates would I get? Am I right in assuming that I would get the current mortgage rate (2.79 % for 5 yrs) with HSBC for any additional borrowing on the mortgage?  Will any additional borrowing affect my current mortgage including the existing homeowner loan and its rate?

Thanks in advance!

K_S

@daverave7 I don't have any comment on the pros/cons of consolidating unsecured debt on to your mortgage.

With respect to the mechanics, HSBC will consider additional-borrowing for the purpose of debt-consolidation. The rate that you will get will be a new current rate and this will be an extra 'part' to your mortgage. It should not have any impact on the existing parts.

Even though you will pay off the cc debt with the additional borrowing, the high debt-to-income ratio may make it more difficult to pass the 'credit-scoring' that HSBC will do as part of the application, but that will depend on the specifics and the rest of the case as well.