Remortgage warning from Bank of England
Some homeowners could be putting their homes at risk by extending their mortgages to pay off other debts, the Bank of England has warned.
Around a quarter of the people who remortgaged last year for bigger homeloans last year said that the main reason was to pay off other debts, such as credit cards and personal loans.
While consolidating debts in this way can be sensible for some, experts warn that ‘robbing Peter to pay Paul’ could simply postpone the pain for those who stretch their mortgage borrowing to the limits.
Latest figures show that mortgage borrowing jumped by £10.5 billion in January, the biggest monthly rise for 18 months, with a large proportion of this attributed to remortgaging.