Can I Borrow Against My House Whilst in a Debt Management Plan? 🤔
Yes, it may be possible to borrow against your house whilst in an active Debt Management Plan (DMP). Although many high street mortgage lenders are reluctant to lend to applicants with adverse credit, some specialist lenders may consider homeowners with an active or completed DMP.
Depending on your circumstances, you may be able to release equity from your property through a remortgage, further advance or second charge mortgage (secured loan).
At Celtic Finance, we specialise in first and second charge mortgages, helping homeowners explore borrowing options where their credit history is less than perfect.
Can I Remortgage With an Active Debt Management Plan? 📝
Potentially, yes! Some specialist mortgage lenders may consider a remortgage with an active DMP, depending on your credit history, property equity, income and affordability.
A remortgage replaces your existing mortgage with a new first charge mortgage, potentially allowing you to release additional funds from your property.
Lenders may consider:
Your DMP status: How recent? Still active? Settled?
Credit history: Any defaults, CCJs or missed payments - most lenders need 12 months of no missed payments on the DMP.
Property equity: Your current loan-to-value (LTV) - the lower the LTV, the less risk to the lender
Affordability: Whether the new mortgage repayments are sustainable.
Remortgaging may not be suitable if you have a competitive existing mortgage rate or would incur significant early repayment charges.
Can I Get a Further Advance Whilst in a DMP? 📝
A further advance allows you to borrow additional funds from your existing mortgage lender, usually secured under your current mortgage arrangements.
However, many mainstream lenders have restrictive criteria concerning active Debt Management Plans and recent adverse credit.
If your existing lender declines a further advance, a specialist remortgage or second charge mortgage may be worth exploring.
Can I Get a Second Charge Mortgage With a DMP? 📝
Yes, potentially! Many specialist lenders can consider a second charge mortgage with an active DMP, even where a high street lender has declined additional borrowing.
A second charge mortgage, also known as a secured loan, allows you to borrow against the equity in your home without replacing your existing first mortgage.
This could be particularly useful if you:
Want to keep your existing fixed-rate mortgage.
Have significant early repayment charges.
Have been declined for a further advance.
Have defaults, CCJs or other adverse credit.
Eligibility depends on lender criteria, affordability, credit history and available property equity.
However, acceptance is usually much more common when compared to a remortgage or further advance! Second charge lenders specialise in situations like these.
How Much Can I Borrow Against My House With a DMP? 💸
The amount you could borrow depends on your property's value, outstanding mortgage balance, income and the lender's maximum loan-to-value (LTV).
For example:
Property details
Property value: £300,000
Existing mortgage: £180,000
Illustrative maximum combined LTV: 75%
Potential additional borrowing: £45,000
In this example, up to £45,000 of additional borrowing could theoretically be available,, subject to affordability and lender criteria.
Case study example 🎉
We recently completed a second charge case for a client in an active DMP (rates correct as of 12 November 2026).
This client was able to consolidate £41,000 of credit card and loans debt, saving them £900 per month
Their existing lender refused to lend due to the active DMP and amount of credit
A second charge lender agreed the case subject to 12 months of no missed payments on their DMP
The client was able to keep the DMP in place or consolidate it - in this case, it was left in place due to the low monthly payment.
We will always help advise on the pros and cons of both options for you.
5-year fixed rate (with no early repayment charges)
Net loan: £41,000
Term: 25 years
Interest rate: 7.05%
Monthly payment: £318
Broker completion fee: £2995 (added to the loan and included in the monthly payment)
Lender completion fee: £820 (added to the loan and included in the monthly payment)
How Celtic Finance Can Help 🤗
At Celtic Finance, we specialise in complex mortgage cases, including applications involving Debt Management Plans, defaults, CCJs and other adverse credit.
We can review your circumstances, assess your borrowing options and help establish whether a suitable specialist mortgage lender may be available.
Looking to borrow against your house whilst in a Debt Management Plan?
Contact Celtic Finance today to discuss your first and second charge mortgage options.
(no upfront fees, no pressure, just a friendly initial chat to explore what options may be available to you)
