Remortgaging is meant to save cash
I despair. It seems that an increasing number of homeowners are remortgaging to clear other debts.
According to Moneyextra.com, the average remortgage is now £122,541, up 7 per cent on a year ago, partly because of people using the equity in their homes to pay off other borrowing.
No doubt they like the idea of spreading their repayments over up to 25 years (or more) because it reduces the monthly cost, making them feel like they’re paying less.
But this is a total illusion – even if they’re reducing their interest rate by moving what they owe from credit cards or personal loans.
The very fact that the new repayments are spread over decades means they’re going to be paying one hell of a lot of interest, and it will probably cost them far more in the long run.
Remember, the whole idea of remortgaging is to save cash, not throw it away.
