More people remortgage to pay debts
Published On 22 June 2007
More and more people in the UK are taking out homeowner loans or remortgaging their property, new research suggests.Moneyextra's figures show that the average remortgage in the UK is now worth £122,541 - 7.19 per cent more than a year ago.
While the increase could reflect the fact that homeowners are looking to re-fix their mortgage after introductory offers run out, it could also indicate people are using equity in their home to pay off other debt.
Robin Amlot, the senior editor of Moneyextra.com, commented: "Recent reports from the retail sector, including disappointing sales growth figures from both Tesco and Sainsbury's, would suggest that we're not spending this money on goods and services but using it to reduce other debts.
"It seems many people are opting to switch expensive credit card debt and overdrafts into long term low-interest rate mortgage debt.
"Of course, this does mean they could be paying far more interest in the long run but it is one way of reducing immediate monthly outgoings."
Recent figures from Credit Action show that consumer debt in the UK exceeded £1.3 trillion at the end of April.
