Homeowners are remortgaging their properties to pay off short-term debts without understanding the risks or the long-term consequences, according to the Irish Financial Services Regulatory Authority.

The financial regulator's consumer director, Mary O'Dea, warned consumers yesterday to consider the implications of remortgaging their home.

She said advertisements showing how homeowners can lower their monthly repayments by rolling all of their existing debts into a single mortgage loan were tempting, but that it could be a risky financial strategy.

"Spreading the cost of short-term debt like credit card bills or a personal loan over the life of your mortgage will cost you considerably more in interest in the long term," Ms O'Dea said.

The financial regulator's new guide to mortgages shows how a borrower who rolls €58,000 of short-term debts into a 20-year mortgage with a balance of €100,000 will end up paying almost €12,000 more than if they had repaid the loans over the original terms, despite the fact that higher interest rates apply to short-term loans than mortgages.

Ms O'Dea said homeowners considering consolidating their short and long-term loans should ask their lender if they can split the loan so that the personal loans and credit card debt element of the loan is repaid over a shorter term than the main mortgage.

"Consolidating means you will have a larger mortgage and therefore interest rate rises will have a bigger impact on your monthly repayments than they would with your existing mortgage," she added.

Copies of the regulator's mortgage guide, Mortgages Made Easy, are available by phoning the helpline on lo-call 1890 777 777, by visiting www.itsyourmoney.ie or from the financial regulator's consumer information centre at 6-8 College Green, Dublin 2.