A single, smaller monthly payment can feel like a sensible escape route when several debts are competing for attention.

But the payment is only one part of the picture. If credit cards and loans are folded into a mortgage, the debt may be repaid over many more years.

That can reduce the pressure today while increasing the total amount paid overall.

The other uncomfortable change is security. Credit cards and most personal loans are usually unsecured.

Once that borrowing is added to a mortgage or other secured loan, your home is being used as security for debt that was not previously tied to it.

MoneyHelper says a secured consolidation loan is secured against an asset, usually your home, and warns that missing repayments could mean losing it.

The Financial Conduct Authority also says advisers should consider both the cost of extending the repayment period and whether it is appropriate to secure previously unsecured borrowing against a property.

A Norfolk illustration

Imagine a homeowner in, say, North Norfolk with two debts totalling £20,000.

This is an illustrative example, not an actual reader case.

The first debt is an £8,000 credit-card balance at 24.9% repaid over four years.

The second is a £12,000 personal loan at 9.9%, also repaid over four years.

Using standard monthly repayment calculations, the combined payment would be about £569 a month.

The total repaid would be roughly £27,292, before any fees or changes in the assumptions.

Now imagine that the £20,000 is added to a mortgage at an illustrative 5.5% rate and spread over 20 years.

The monthly payment on that part of the borrowing falls to about £138.

That is a reduction of roughly £431 a month. It may create valuable breathing space if the original payments have become unaffordable.

But over 20 years, the £20,000 would produce total repayments of about £33,019.

In this simplified comparison, the lower monthly payment costs around £5,727 more overall than repaying the two debts over four years.

The figures exclude arrangement fees, valuation costs, legal costs, early repayment charges and any future change in the mortgage rate.

They are not a recommendation or a quotation.

Their purpose is to show why “how much will I pay each month?” is not enough of a question.

When might consolidation genuinely help?

Consolidation can be worth cosidering l where it is affordable, suitable and part of a realistic plan to stop the debt building again.

MoneyHelper suggests looking at whether the new arrangement clears the existing payments, reduces the total amount payable and lowers the interest cost after fees and charges.

The reason for the debt matters too. A lower payment does not solve a monthly shortfall if the underlying problem is that essential spending is already higher than income.

It may simply create room to borrow again.

A proper comparison should include:

- the balance and interest rate on every existing debt;

- the remaining term and total repayment on each one;

- the new loan or mortgage rate, term and total repayment;

- fees, early repayment charges and any advice or broker costs;

- what happens if the rate rises or income falls;

- whether the new borrowing is secured on the home.

It is also worth asking whether all of the debt needs to be consolidated.

Moving only the expensive portion, or using a non-secured option where appropriate, could produce a different result.

The right answer depends on the person’s circumstances, credit position, affordability and the alternatives available.

The red flags to take seriously

Be cautious if the proposal is being sold mainly on the size of the monthly saving.

 The FCA’s March 2026 review of second-charge mortgage firms found examples where advice steered customers towards debt consolidation without making clear that it was suitable.

It also highlighted cases where affordability assessments appeared to overlook important living costs.

The regulator says firms should explore the root cause of growing unsecured debt, discuss alternatives and explain what could happen if payments are missed.

A secured loan can be affordable on paper and still be the wrong solution if it leaves the household exposed to future shocks.

Ask for the total amount payable in pounds, not just the interest rate.

Ask how long each debt will remain outstanding.

Ask whether the adviser has compared the recommendation with free debt advice and non-secured options. And ask what happens to the family home if the new payments cannot be maintained.

If you are already missing payments or relying on credit for essentials, seek independent debt advice before arranging new secured borrowing.

The FCA directs consumers towards free debt guidance through MoneyHelper’s debt advice locator, rather than assuming that another loan is the answer.

The plain-English test

Debt consolidation genuinely helps when it makes the whole position more affordable, reduces the overall cost or prevents a serious problem from escalating  and when the risks are understood.

It is a warning sign when the only clear benefit is a lower payment this month, while the debt lasts for another decade or two and becomes secured against the home.

The question to put to an adviser is simple: “What will I pay in total, for how long, and what do I risk by securing this debt against my home?”

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