People 'remortgage to cover debts'
Published On 30 August 2007
More and more people in the UK are considering remortgaging their home to pay off existing debt, an industry expert has said.Sue Anderson, head of member and external relations at the Council of Mortgage Lenders (CML), said that people were also using remortgages and homeowner loans to finance DIY and home improvement projects.
She added that people often opted for remortgaging because they believed they could "get a better deal than the one they feel they are currently on".
In addition, Ms Anderson explained: "People are looking to release equity from their home - if they've got a relatively small mortgage compared to the overall value of the property then they might be looking to borrow more against the value.
"I'm sure the proportion [of homeowners] … that are using it to consolidate other debts or to replace more expensive, unsecured debt with less expensive secured credit is likely to be increasing."
However, Ms Anderson added that consumers should always check out the associated costs when thinking about remortgaging.
She concluded: "It's worth looking carefully at the key facts illustration that they would be given, just to make sure that they're fully aware of all the particular costs involved."
