remortgaging- should i add my debt to it?

russellbarrett

my fixed rate is ending on my mortgage next month so its time i changed. i have 70300 left to pay and i also have around 16k of debt, i rang the woolwich (who i am currently with) to see what they could offer. i asked them if i could add my debt to it and a little more as my car is quite near to the end, bringing the total to 90300. they've offered me a fixed rate for 2 years at 6.89%. i'm currently paying 4.79% so this seems a bit high to me. is it because i am using it to consolidate my debt or is that just what the rate is nowadays?
i would appreciate any input or suggestions.
my house is worth 110000 by the way and my annual income before tax is 24000.
thanks in advance
russ

apk1

I suspect this is a "retention" product they are offering with low fees, however there will be a £150 fee for the additional borrowing. I would suggest looking elsewhere such as A&L who have a 6.34% fixed which should be more or less fee free.

As to whether you should secure your debts, potentially you will be paying more interest if you take over a longer term, or you could split the mortgage, so the additional borrowing is over a shorter term.

Peolple will argue you should not secure as you could lose your house over a loan in effect, personally I think it makes very little difference as if you owe a lender money and you have property they will come after you, and put a charge on your property, the only difference being this will cost them more, if it costs them more, the cost will be passed to you.

Think carefully and shop around