Youth minister the Rev
He says: "I was on a lifetime tracker with Woolwich at 2.89% but I started thinking that rates might go up and we wanted the security of a fixed rate. Through
"We need to get home improvements done, and friends suggested adding on money to the new loan and paying it off over the term of our mortgage.
"We got some quotes for the work and decided we didn't want our mortgage payments to go up by more than pounds 100 a month. We've stuck to that. We're getting our bathroom redone, adding a shower room and knocking down our conservatory and putting up a new one. We've borrowed an extra pounds 20,000 and our mortgage payment is going up just pounds 98 a month."
Soaring house prices and low interest rates mean homes are once again the piggy banks from which owners are releasing wads of cash.
Negative equity has almost vanished in the latest house price boom, according to estate agency Countrywide. It says that while 60% of first-time buyers who bought before 2007 found themselves by 2008 with a home worth less than the mortgage, today the number is just 6%.
Meanwhile, estate agency Haart's National Housing Market Monitor suggests that the average
Now, with interest rates at ultra-low levels, many people are again seeing remortgaging as a cheap form of borrowing - and indeed, adding pounds 2,000 to a mortgage over 20 years at 3% will cost just pounds 11 a month. However, releasing equity from your home in this way comes with pitfalls.
Mark Harris, chief executive of mortgage broker SPF Private Clients, has mixed feelings. "Remortgaging to repay expensive debt such as credit cards and personal loans is sensible as mortgage rates are lower than unsecured borrowing," he says. "But if you are converting short-term debt to long-term, you need to think carefully, as you could end up paying back more in the long run."
Adding pounds 10,000 to a mortgage at 3% over 20 years will see your monthly payments go up by about pounds 55, which is much cheaper than the pounds 186 a month it costs for a personal loan for the same amount, assuming a rate of 4.5% APR, paid back over five years .
But the total interest bill for each option shows that remortgaging would cost pounds 6,000 in interest over 20 years and the personal loan pounds 1,161 over five years - pounds 4,839 less.
People considering remortgaging to raise cash also need to consider what will happen the next time they want to refinance. While mortgage rates are low now, they will inevitably rise.
"The best rates are still available to those with the most equity in their homes, so it's worth remembering that if you extend your mortgage it may cost you in terms of the rate you remortgage to at the end of your existing deal," warns Harris.
Those homeowners who do decide to remortgage to release cash won't find it as easy as it used to be. New rules that came into effect on 26 April mean lenders are now doing a lot more checks on borrowers' income and outgoings to ensure they can afford their mortgage both now and in the future. It's not just first-time buyers and movers affected by the new rules; those remortgaging are too.
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