How Much Equity Do I Need to Consolidate Debt?

Last updated: 11 September 2026

What equity actually means

Equity is the part of your home you own outright, in cash terms. It's calculated as your property's current market value minus everything secured against it, most commonly just your mortgage balance. If your home is worth £280,000 and you owe £190,000 on your mortgage, you have £90,000 of equity.

This figure matters because a secured loan, homeowner loan or second charge mortgage, along with a remortgage or further advance, all use your existing equity as the basis for how much more you can borrow. Lenders aren't just looking at whether you can afford the new payment, they're also looking at how much of a safety margin exists between what you'd owe in total and what your home is worth.

It's worth saying clearly that equity isn't cash sitting in a bank account. It's a value tied up in bricks and mortar, and the only ways to turn it into money you can use are selling your home, or borrowing against it through one of the routes above.

How to work out your own equity

You can get a rough figure yourself in two steps. First, get a realistic estimate of your property's current value: a recent online estimate, a local estate agent's opinion, or a comparison of similar sold prices nearby all work for a rough figure, though a lender will use a formal valuation later in the process. Second, add up everything already secured against your home: your main mortgage balance, plus any existing second charge mortgage or secured loan you already have. Subtract the second figure from the first, and what's left is your usable equity.

It's worth noting that equity isn't the same as how much you could borrow. Lenders lend against a proportion of your property's value, not against your equity pound for pound, which is why the loan-to-value limit matters just as much as the equity figure itself.

How much lenders typically allow

There's no single figure that applies to every lender, but as a general guide, most lenders offering secured loans for debt consolidation will lend up to somewhere between 75% and 90% combined loan to value, that's your existing mortgage plus the new secured loan, measured against your property's value. Some specialist lenders will go higher in the right circumstances, others cap it lower, particularly if your credit history has some issues.

A remortgage or further advance from your existing lender works on a similar principle, though the maximum combined loan to value it will allow depends on that lender's own criteria and your circumstances at the time. Either way, the general rule holds: the more equity sits behind your existing mortgage, the more room there typically is to borrow against it.

Loan to value is only one part of the assessment, though. Lenders also check that you can afford the new monthly payment alongside your other outgoings, and will look at your credit history, so a strong equity position doesn't automatically mean an application will succeed on its own. If your credit history has some issues, our bad credit hub covers how that's typically weighed up alongside equity.

How equity translates into borrowing: a worked example

Here's how the numbers can look at three different levels of equity, all on the same £150,000 mortgage balance, assuming a lender is willing to go up to 85% combined loan to value.

Property value	Mortgage balance	Equity	Room to borrow at 85% LTV
£200,000	£150,000	£50,000	£20,000
£250,000	£150,000	£100,000	£62,500
£320,000	£150,000	£170,000	£122,000

Notice that the room to borrow is always lower than the equity figure itself, because the lender is capping total borrowing at a percentage of the property's value, not lending out the full equity. Take the middle row: £100,000 of equity, but £62,500 of realistic room to borrow at 85% LTV. If that homeowner used £20,000 of it to consolidate unsecured debt through a secured loan, here's how the numbers could look, using fixed illustrative figures rather than a live quote.

	Amount
Current monthly payments (credit cards and a personal loan)	£430/month
New secured loan payment (£20,000 at 7.9% over 15 years)	£190/month
Total repayable over the 15-year term	£34,200

What if you don't have much equity

If your equity is limited, perhaps you're early into your mortgage, or your property's value hasn't moved much, secured consolidation may still be possible, just for a smaller amount than you were hoping to raise, or it may not be viable at all once a lender's loan-to-value limit and affordability checks are applied.

For example, a homeowner with £15,000 of equity and a lender capped at 85% combined loan to value may only have a few thousand pounds of realistic room to borrow, even though their total unsecured debt is much higher. In that situation, a small secured top-up might clear part of the debt, but not all of it, and it's worth weighing that against the fees and the security involved before deciding it's the right move.

That doesn't mean you're out of options. An unsecured personal loan doesn't rely on home equity at all, though rates are usually higher and the amount available is typically lower than a secured route. If your unsecured debt is high relative to your income and neither a small secured top-up nor an unsecured loan would realistically clear it, it's worth speaking to a free debt advice charity about routes like a debt management plan, which don't depend on equity at all.

How a broker can help

A broker can give you a realistic view of your likely equity and how far it's likely to stretch, without needing a formal valuation upfront and without it affecting your credit score. They'll compare a second charge mortgage, a remortgage and a further advance side by side, using your actual figures rather than the illustrative ones used in this guide, so you can see the real cost of each option before deciding whether to proceed.