You only have to switch on the television or radio these days in order to hear about debt consolidation remortgages and debt consolidation secured loans. As homeowners we are told that debt consolidation remortgages can reduce our monthly outgoings by incorporating existing loans and credit cards into our monthly mortgage repayments. Although are we really better off doing so? The answer is of course that it's largely down to our individual circumstances and each case should be assessed on its own merits. In the world of finance there is no such thing as a ‘one size fits all' type of mortgage.

There is no question that the most competitive rates of interest on borrowing are usually offered by mortgage lenders - and in particular, first mortgage lenders as opposed to secured loans. The interest rates on credit cards and store cards of course will vary however most will charge in excess of 15%. This form of borrowing carries a high interest rate largely due to its unsecured nature and it accessibility to nearly all types of borrower - For those with both a perfect credit history and those with a credit impaired one.

Consolidating such debts by way of raising the equity in the property can help achieve significant savings in an individual's monthly outgoings. There are however a number of negative factors to bear in mind with this course of action. Firstly the number one point to consider is that when consolidating loans and credit cards by way of a remortgage will then result in such debts being secured against the property - When they were once unsecured. The resulting factor if a borrower failed to keep up with their repayments on a mortgage would be property repossession - A consequence that is not applicable to defaulting payment on a unsecured bank loan or credit card.

The next point to consider is that when consolidating existing debts into a remortgage; the borrower will usually arrange the mortgage repayments over a longer period of time than that of the original loan arrangement. This can result in the borrower paying out more in interest over the longer term.

It is common for individuals in today's society to have many different forms of credit such as bank loans, credit cards, store cards and hire purchase - All of which require a some form of monthly payment whether this is a fixed amount each month or a minimum ‘token' amount based on the outstanding balance. With such multiple outgoings it can at times be difficult to keep track of all finances especially when there are mortgage repayments to be met in addition. Aside from the monthly savings that can be achieved through a debt consolidation remortgage; the benefit of reducing the number of outgoings into one monthly payment will also appeal to many homeowners. In this way by arranging a debt consolidation remortgage can help a person to budget and manage their finances more effectively and efficiently.