(1888PressRelease)
June 29, 2007 - Figures released by price comparison website Moneyextra show the average re-mortgage is now £122,541, up 7.19 per cent from last year's equivalent.
Moreover, the average mortgage for a first-time buyer have rose by 2.99 per cent in the last year, and the mean mortgage as a whole by 2.95 per cent - making all groups increasingly susceptible to financial crises should the Bank of England's monetary policy committee choose to hike rates in July.
"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," commented Robin Amlot, senior editor of Moneyextra.
"It seems many people are opting to switch expensive credit card debt and overdrafts into long term low interest rate mortgage debt. Of course, this does mean they could be paying far more interest in the long run but it is one way of reducing immediate monthly outgoings."
The idea of getting further credit arrangements to fund mortgage payments is a disaster waiting to happen says property buying firm National Homebuyers. Director Julian King says: "Taking out loans or extending overdrafts to fund a mortgage will kill the homeowner."
"The fact is, affordability is a problem for thousands of homeowners and borrowing to pay off borrowing is a spiral that will only result in increased debt.
"People needing to sell their homes are finding it difficult on the open market because of the lack of buyers and are seeking alternative ways to sell their house."
National Homebuyers is the UK's leading fast purchase property firm, guaranteeing to make a cash offer to buy any property quickly for vendors who need a quick sale. The company also pay for legal fees and can arrange an equity release solution, sell and rent back, allowing the homeowner to release capital in their property without the need to move out.
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