Selling Your House to Pay Off Debt | Sell House To Clear Debt
As of the fourth quarter of 2024, the UK debt-to-income ratio was 118.1%, according to the Commons Library. This means that for every £1 of income earned, £1.18 is owed in debt. Rising energy prices and tax increases are placing growing financial pressure on UK households.
For many, the equity in their home is one of their largest financial assets and, when it comes to how to get rid of debt quickly, it sometimes comes under consideration as a viable option to release equity quickly. In this article, we’ll look at the options you may have to help get out of debt and whether selling your home is the right choice.
Is it smart to sell my house to pay off debt
Whether you’re looking to pay off credit card debt or are concerned about the risk of a loan gathering more interest, selling property can be a quick way to release equity and gain some control back over your finances.
However, selling your house to pay off debt is something that should only be done after very careful consideration. There are many factors to consider, such as the long-term consequences of selling your property and whether there are other alternatives.
If you’re looking to release equity from your home to pay off debt, you should consider whether there is even enough equity to pay off the amount you owe, after taking into account any outstanding mortgage debt. You can do this by finding out how much your house is worth and subtracting that amount for your outstanding mortgage balance.
How common is it to be in debt?
Unsecured debt in the UK is at around £400 billion, approximately £14,300 per household, as of March 2025. According to the Joseph Rowntree Foundation, 4.3 million (37%) low-income households were behind on at least one household bill in October 2024.
With this in mind, it’s very common to be in debt and the number of households who are living with debt is relatively unlikely to change in the near future. Inflation, the cost of living crisis, rising energy bills, and tax increases have all contributed to a growing financial burden on households in recent years.
Alternatives to selling your house to pay off debts
Selling your home to pay off debts is an extreme measure to take. Your home is likely to be your biggest financial asset and sacrificing this to pay off debt could potentially leave you in a worse financial position in the long term.
There are many viable alternatives to selling your home to pay off debt. Naturally, each of these depends on your own personal circumstances.
Downsizing
While downsizing involves selling your home, it allows you to retain a property asset. Downsizing your home and taking on a smaller mortgage means that you may be able to release some equity from your current property to pay off debts and leave yourself with smaller monthly mortgage payments.
Interest-free borrowing
Many credit cards will offer a 0% interest introductory rate for the first year or so. If your credit card debt is accruing interest, making it harder to pay off, consider applying for a 0% balance transfer card.
Debt consolidation loans
A debt consolidation loan could offer a lower interest rate and a way to move any existing debts into one place where monthly payments are lower and easier to manage.
Contact the national debtline
Dealing with debt can be worrying and stressful. The National Debtline exists as a free service to offer impartial and confidential advice to those who are struggling with debt and need support to find a pathway out.
What is the process for selling your house to pay off debts
If you’ve assessed all of the options available and come to the decision that selling your house is the best route to take to help clear your debts, kicking off the process of selling your home is the next step.
It can take a lot of time to complete a sale, with 51% of home sellers failing to sell within ten months. Typically, a successful process can take around three to four months, however, if you’re involved in a property chain this process can take longer. If you’re looking to release equity quickly in order to pay off a debt, you may find that a house sale doesn’t provide the quick solution that you need.
Only once your sale is complete and the equity is released to you can you use that money to pay off any debts.
How much will it cost to sell my home?
The process of selling your home itself can be expensive. If you include estate agent fees and solicitor fees, cost of conveyancing, carrying out any repairs ahead of sale, you’ll find the equity that you receive from the sale could very quickly begin to dwindle.
To avoid losing more money from your equity, you may want to consider using a cash house buyers method of selling, such as Good Move. That way, you won’t be paying any money out in legal fees or estate agent fees.
How to sell your house quickly to repay debts
If you’re in a hurry to sell your house quickly to repay debts, a cash house buyer company such as Good Move can help you sell your house fast. We’ve helped people sell their properties in as little as ten days, providing a cash offer within the first 24 hours of getting in touch.
If you’d like to sell your home quickly, get in touch with our experienced professionals at Good Move today.
If you’d like to sell your home quickly, contact our experienced professionals at Good Move today.
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