Lenders using different debt consolidation mortgage policies

by Aaron Strutt

Sep 14 2020

Trinity Financial is helping a range of clients to remortgage and consolidate unsecured debts including credit cards and loans.

Some lenders are happier to process debt consolidation mortgage applications than others, and they have different qualifying criteria. For example, HSBC and Santander limit the amount borrowers can consolidate while other lenders do not have a cap.

Aaron Strutt, product director at Trinity Financial, says: “Lots of borrowers are refinancing to repay credit cards, loans, car loans and even to provide a gift to a relative. Most of the borrowers we are helping to refinance are looking to make their life easier and bring down their monthly costs.”

Trinity's brokers have to conduct debt consolidation checks to ensure it makes sense to refinance. We have to justify the remortgage for clients if they have less than 12 months to run on a loan or a 0% credit card. For these borrowers, it may not be the best advice to repay the debts and spread the repayments out over a much longer term.

List of lending policies

• Accord Mortgages: The society does not have a set policy for personal debt consolidation providing the borrower meets the affordability calculation and has a good credit score.
• Barclays: Where any additional borrowing is to be used for debt consolidation, the maximum loan-to-value is limited to 80% in all instances.  
• Halifax: There is no set limit although each case will be assessed on an individual basis.
• HSBC: has a cap of £30,000 for debt consolidation and a maximum loan-to-value of 80%. It reduces to 75% loan-to-value if there is any element of interest-only borrowing.
• Nationwide Building Society: For remortgages the maximum loan-to-value is 80%. The lender uses a debt to income calculation to work out how much you can borrow.
• NatWest: There is no limit for debt consolidation and debts to be repaid are not included in the affordability calculation.
• Santander for Intermediaries: The maximum amount allowed for a loan part(s) where the purpose is debt consolidation is £35,000, or 35% of the total lending (whichever is lower).
• Virgin Money: Debt consolidation is capped at £25,000 and unsecured debt is limited to 90% loan-to-value.

Think carefully before securing other debts against your home, your home may be repossessed if you do not keep up repayments on your mortgage.

Call Trinity Financial on 020 7016 0790 to secure a debt consolidation mortgage