Although the high volume of financial advertising has certainly dropped considerably of late, suprisingly credit is still available although perhaps not so blatantly put forth as it once was. But still, almost every store we go into is offering credit on 'easy terms' and credit card companies are still offering 0% interest rates in abundance.  And once you've got a credit card, before it's settled into your wallet or purse the company are telling you there's no problem in upping your credit limit or a loan might be useful ...... and so it goes on.

But never mind how it happened, if you have got a lot of debt with various sources then you are almost certainly paying a high rate of interest for this, and the basic rule is - if you are a homeowner, there should normally***  be no need for you to be paying interest on any loan, credit card, bank loan and the like at a higher rate of interest than you are paying on your mortgage. Read that again slowly - and think about it, for it's true!

***But times are not 'normal' at the moment and whilst the above statement still holds true many are finding that for a variety of reasons it is just not possible to transfer credit card and other debt on to a mortgage even if they wanted to, because of the limitations on the amount that can be borrowed overall in relation to the property value.

Additionally, many with substantial outstanding credit are a little reluctant to transfer credit cards and other finance to a mortgage, because, for example, they didn't like the idea of a 3 year loan for a car, say, being transferred to a 25 year mortgage payment!  This is quite understandable, but nowadays there is no need for this to cause concern.  This is because with most mortgages you can transfer high interest rate loans into the mortgage arrangement but continue, if you wish, to pay off the balances you transferred at the same amount as before - this means that you will pay them off far quicker at a much lower interest rate.  You will find that with most lenders you can overpay on your mortgage by at least 10% of the outstanding mortgage balance.

As you probably do not need reminding, the interest rate you are paying on your credit cards and store cards could be three or even four times your mortgage interest rate!    If you are a homeowner then there should be no need for this at all, because by a simple remortgage exercise you can normally bring all your outstanding credit into your mortgage arrangements. However, all this assumes you have handled  all your credit well.  Since the arrival of the 'credit crunch' lenders are scrutinising remortgages far more carefully, and if there is evidence that you have not been paying your credit promptly, you may have difficulties with a remortgage.

It is also most important to bear in mind that if you transferred expensive credit to a mortgage arrangement, whilst this could well reduce your outgoings considerably, if you left things at that, and did nothing more you could end up in the long term paying considerably more interest.  It is important to 'up' your mortgage payments if at all possible to compenate for the additional high interest borrowing which you have added to your  much lower interest rate mortgage.

We suggest you have a quick look at the 'what is a remortgage ' section for more information.