You may be able to remortgage while on a debt management plan (DMP), or after it has finished, but fewer lenders consider an active plan and your options depend on how your creditors have reported each account. A DMP is not a legal insolvency and is not on a public register. What lenders see are the individual accounts: arrangement to pay markers, missed payments or defaults. Nothing is guaranteed, and an adviser will want to see the detail.
Some people want to remortgage to clear their DMP using equity in their home. That can lower monthly outgoings, but it turns unsecured debt into debt secured on your home, so it needs careful thought. This page covers both situations.
On this page
In short
- A DMP is informal: it is not insolvency and is not on a public register.
- Lenders see how each creditor has reported the account, which can include defaults.
- A completed plan is usually viewed more favourably than an active one.
- Using a remortgage to clear a DMP secures the debt on your home.
How does a debt management plan show on your credit file?
A DMP is an informal agreement to pay your creditors a reduced amount each month, usually through a provider. Because it is informal, creditors are not bound by it, and each one decides how to report your account to the credit reference agencies.
| Marker | What it means | How long it can show |
|---|---|---|
| Arrangement to pay | The creditor has agreed to accept reduced payments. | Shows while the arrangement runs. The account history usually stays for 6 years after the account is closed or settled. |
| Late or missed payments | Payments below the contractual amount may be recorded as arrears. | 6 years from when each is recorded. |
| Default | The creditor has closed the account after missed payments. | 6 years from the default date, whether or not it is paid. |
| Settled or partially settled | The balance was cleared in full, or the creditor accepted a reduced settlement. | A defaulted account still drops off 6 years from the default date. Paying it does not shorten this. |
Based on how UK credit reference agencies generally hold information. Creditors report in different ways, so check your own reports.
This is why two people on similar plans can have very different credit files. Check your statutory reports from all three agencies before applying, using our notes on what lenders check on your credit file. If accounts have defaulted, our page on remortgaging with defaults explains how lenders tend to weigh them.
Can you remortgage with an active DMP?
It can be possible, but the choice of lenders is smaller. An active plan shows you are still repaying debts on reduced terms, and your DMP payment will be counted as a committed outgoing when affordability is assessed.
Lenders often ask how long the plan has run, whether every payment has been made on time and how much is left. Missed DMP payments, or new borrowing during the plan, are likely to count against you.
Talk to your DMP provider as well as an adviser before remortgaging. Raising money against your home can change what your creditors expect from you.
Remortgaging after a completed DMP
Once a plan has finished and every account is settled, lenders see debts that have been repaid. That is usually viewed more favourably than an active plan, especially if your record has stayed clean since.
The accounts do not disappear when the plan ends. Any defaults stay for 6 years from their default date, and settled accounts remain on file for a period after closure. Keep the completion letter from your provider and any settlement letters from creditors.
Should you use a remortgage to clear a DMP?
Clearing a DMP by borrowing against your home ends the plan and replaces several payments with one. For some people it makes sense. For others it swaps a flexible, informal arrangement for a debt secured on their home, often over a much longer term.
Points to weigh up
- Unsecured debts become secured on your home. If you cannot keep up the mortgage, your home is at risk.
- Spreading debt over a mortgage term can mean paying more in total, even if the monthly cost falls. See debt consolidation remortgages.
- Paying off defaulted accounts marks them as settled but does not remove them from your file early.
- Some creditors may accept a reduced full and final settlement, which is recorded as partially settled.
- If your plan is close to finishing, waiting may leave you in a stronger position.
- Leaving your current mortgage deal early can mean paying early repayment charges.
A regulated mortgage adviser must consider whether consolidating debts into a mortgage is appropriate for you. Getting free debt advice first can help you see the full set of options.
Free and fee-charging DMP providers
DMPs are available free from debt charities, and from firms that charge fees. Fee-charging providers take their fees from your monthly payment, which can mean less goes to your creditors and the plan runs for longer.
StepChange offers free DMPs, and MoneyHelper and National Debtline give free, impartial debt advice, including whether moving from a paid provider would help. Debt management firms must be authorised by the Financial Conduct Authority.
If your mortgage payments are also becoming difficult, speak to your lender early. Lenders must treat struggling borrowers fairly and consider options such as a payment arrangement.
Other options to compare with a remortgage
If you are not borrowing more, a product transfer with your current lender can secure a new deal without a full affordability assessment, which can suit people with an active plan. A second charge mortgage may be worth comparing if leaving your current deal would mean large early repayment charges, although it also secures debt on your home.
Any missed payments or mortgage arrears on your file will form part of the assessment too.
What may affect your remortgage options
No two DMPs look the same on a credit file. These points most often shape what may be possible.
| Factor | Why it matters |
|---|---|
| When the plan started or ended | A plan that has run smoothly for several years, or finished some time ago, is generally easier to place than one set up recently. |
| Amount still owed | The remaining balance affects affordability, and how much equity you would need if you want to clear the plan. |
| Whether accounts are settled | Accounts marked settled, or a completed plan confirmed in writing, show the debts have been dealt with. Partially settled accounts are recorded as such. |
| Number of creditors and markers | A plan covering several accounts can mean several defaults or arrangement markers, and lenders look at the pattern across all of them. |
| Mortgage payment history | Many people on a DMP keep their mortgage up to date. A clean mortgage record throughout the plan can help. |
| Property value | A current valuation shows how much equity is available and whether clearing the plan is realistic. |
| Outstanding mortgage balance | Your existing balance, plus any money raised to settle DMP debts, sets the size of the new loan. |
| Loan-to-value and equity | Borrowing extra to clear a DMP pushes up your LTV, which can narrow your options. Our guide to LTV and bad credit remortgages explains why. |
| Income and affordability | While the plan is active, your DMP payment counts as a committed outgoing. Lenders stress test the mortgage payment on top of it. |
| Employment type | Employed income is usually simpler to evidence. If you are self-employed, lenders will look at accounts or tax calculations as well as the plan. |
These are general points, not lender rules. Each lender sets and changes its own criteria.
Information an adviser may ask for
You don’t need all of this to make an enquiry. It helps to know where to find it, because an adviser is likely to ask about most of it.
- The name of your DMP provider and the date the plan started
- Your latest DMP statement showing balances and payments made
- A list of the creditors in the plan and how much is owed to each
- The completion letter and any settlement letters if the plan has finished
- Your credit reports from Experian, Equifax and TransUnion
- Details of your current mortgage, including any early repayment charges
- Proof of income and a summary of your monthly outgoings
- Whether you want to clear the DMP as part of the remortgage
Specific debt management plan situations
More detail for particular circumstances.
Remortgaging with an active debt management plan
What an active debt management plan means for a remortgage, how the monthly payment is assessed, and what to check before applying.
Remortgaging to clear a debt management plan
How using a remortgage to pay off a debt management plan usually works, the risks of securing unsecured debt on your home, and other options to compare first.
Remortgaging after a completed debt management plan
What stays on your credit file once a debt management plan has finished, how the timing of old defaults matters, and what tends to help a remortgage from here.
Remortgaging on a token payment plan
What a token payment plan is, why it usually signals little spare income, and what tends to be realistic in terms of a remortgage or a like-for-like renewal.
Frequently asked questions
Do I have to declare a DMP on a mortgage application?
Yes, if the application asks, and many do. Lenders often ask whether you have been in a debt management plan, and they may see arrangement markers or defaults on your file anyway. Leaving it out can lead to a decline or an offer being withdrawn. Being upfront lets an adviser approach lenders whose criteria fit your situation.
Will a lender make me pay off my DMP to remortgage?
Some lenders may require certain debts to be repaid as a condition of the loan, particularly if you are raising money for that purpose. Others may lend with the plan still running and count the payment as an outgoing. It depends on the lender and your circumstances. Before agreeing to clear a plan this way, read about debt consolidation remortgages and consider free advice.
Does a DMP show on the Insolvency Register?
No. A DMP is informal and is not a public record, so it does not appear on the Individual Insolvency Register. This is one way it differs from an IVA or bankruptcy. The effect on your credit file comes from how each creditor reports its account. If you are weighing up a formal option, see remortgaging after an IVA for how that compares.
My DMP accounts defaulted years ago. Do they still count?
A default stays on your file for 6 years from the default date. Many DMP accounts default early in the plan, so by the time it finishes some defaults may already have dropped off. Once they have gone, lenders will not see them on your report, although some application forms ask about past arrangements with creditors. Check the default date on each account.
Can a creditor refuse to accept my DMP?
Yes. Because a DMP is informal, creditors do not have to accept reduced payments and may still add interest or charges, or take further action. Many do agree, but it is not guaranteed. If a creditor obtains a county court judgment, that can affect a future remortgage more than the DMP itself, so tell your provider quickly about any court papers.
Is a fee-charging DMP viewed differently by lenders?
What usually matters to a lender is your payment record and how the accounts are reported, rather than whether your provider charges fees. The main difference is to you: fees can mean the plan takes longer, which keeps it active on your file for longer. A free provider such as StepChange can explain whether switching would help.