Nearly two million people in the UK remortgaged to consolidate debt, according to Purely Mortgages.
According to the new study, 1.85 million British people have used re-mortgaging as a tool to consolidate debt, which is the second most common reason for freeing up equity from their home. The study also showed that only 25% of people consider a lenders actual rate when re-mortgaging.
Our view
Re-mortgaging and putting short term, unsecured debt into longer term mortgage (i.e. your home is at risk etc) debt is not good. People should be made aware of pitfalls and risks to property. In recent times when property has grown in value, this has not been a problem. However, in times of property decline managing debt may become an issue.