I'm guessing TokenGinger lives north of the Watford Gap, and OP and Jan live south of it :) £500 a month is nowhere near half the monthly household running costs in the south! Blimey, I pay £700/month in rent alone, and I've only got a 1 bed flat!
Well OP, you say you know what you need to do. You are certainly not being unreasonable, and it sounds like you would have the support of your family and friends.
I would like you to consider what your children are currently learning from this man. They are learning that it's okay to be a nasty bully to women. That it's good to laugh and call people fat (whether or not they are.) That women have to do all the housework and childcare even if they work full time. That there's no need to bother with education. That if you can get a credit card, you can waste the money on pointless crap and then expect a woman to bail you out.
What would you say to your daughter, if in 20 years time she ends up with a man like this?
He totally didn't understand why I was upset and told me I was being miserable.
Please, you're not this naïve. Of course he understood it was upsetting and why - that was the whole point. This man is a nasty piece of work who enjoys hurting others, and you in particular. How long do you think it will be until he starts on the children?
Time to give this prize prick his marching orders. Draft up a letter giving him 4 weeks' notice to leave the property (if you're feeling generous and think you can stand his bitching for 4 weeks. Otherwise, make it 1 week.)
If he starts bitching he's got nowhere to go, that's not your problem. If he wasn't such a massive wanker, he'd have friends and family willing to put him up, no doubt. As for "You're taking my kids away from me" - he can have the normal contact arrangements (one weekday evening and EOW) but my gut feeling says he won't bother seeing them, which is probably to their benefit in the long term.