Home owners were today urged to weigh up all the costs and hidden dangers when planning to remortgage property.
The Financial Regulator warned consumers to watch out for the added pressure interest rate rises may cause and that repossession could be on the cards if repayments become too heavy a burden.
Mary O'Dea, director of the watchdog, said putting all debts into single mortgage payments can appear to cost a lot less. But she said: "We are concerned that people may not understand the cost and risk implications of remortgaging their home in order to pay off short-term debts.
"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."
The Regulator published a new guide to mortgages today which showed consolidating €58,000 of short term debts into a 20-year mortgage could cost consumers almost €12,000 more in interest.
Ms O'Dea urged consumers to consider paying the loans off over the original term otherwise the loan will take a lot longer and cost more to pay off.
The Mortgages Made Easy guide detailed all the mortgage options open to house hunters. And it includes a series of tips including getting quotes and information in a number of different ways - over the Internet, by phone and in person, visiting several lenders and letting them know you are shopping around.
If using a broker, the guide warns, consumers should be aware of any hidden fees, and advises getting three or four quotes for different amounts over different terms.
The guide states most lenders and brokers have mortgage calculators and can give you this information quickly and easily, or you can get it yourself on-line.
Ms O'Dea warned consumers to be aware not just of the increased repayments associated with remortgaging but also the other risks.
"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 said.
"Remortgaging can be useful for some people but generally as part of an overall plan to manage your finances more effectively.
"However, if you take on more debt in the future, you may not have the option to remortgage again. Remember - your mortgage is secured on your home and your home is at risk if you cannot afford to meet the repayments."
PA