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Remortgaging `up in May`

21/06/2007

Remortgaging increased during the month of May, according to new research.

Data from Moneyextra indicates that the average remortgage is currently worth £122,541, a figure which is 7.19 per cent higher than one year ago.

Robin Amlot, senior editor of Moneyextra.com, said that the rise suggests that many people may be using their home`s equity to pay off other debts.

He commented: "Recent reports from the retail sector, including disappointing sales growth figures from both Tesco and Sainsbury, 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," he added.

Although this tactic reduced monthly outgoings in the short-term, he added that homeowners run the risk of paying more in the long-term.

Separate research by Spicerhaart Financial Services also pointed to a rise in remortgaging, perhaps prompted by recent increases in the base rate.

Many debts unaffected by base rate cut 09/01/2009 - Yesterday, many borrowers welcomed the Bank of England’s base rate 1.5% base rate – an historic low 08/01/2009 - Today’s base rate cut by the Bank of England’s Monetary Gas price cuts expected 07/01/2009 - Energy company Scottish Power has announced the launch of a Personal debt about £1.5 trillion 07/01/2009 - The UK’s personal debt stands at around £1.5 trillion, according