Brits Urged to Ditch Credit Cards and Consider Loans for Renovations

Thousands of homeowners across the UK are sleepwalking into sky-high interest charges as they plan home improvements, a new study reveals. Pepper Money’s research shows that a staggering 817,400 mortgage holders are gearing up to take on debt for home improvements in the next year – with a worrying 26% (that’s over 212,000 households!) aiming to fund their dream renovations using credit cards.

While splashing out on a new kitchen or bathroom might sound tempting, the research revealed a worrying lack of awareness about the potential financial pitfalls. Over half (53%) of mortgaged homeowners admitted to favouring credit cards to finance these projects. And what’s even more shocking? 67% confessed they’d never even heard of second charge mortgages – a potentially cheaper way to borrow against their property.

Ryan McGrath, the brains behind second charge mortgages at Pepper Money, is urging homeowners to ditch the plastic and explore smarter borrowing options. He warns, “Credit cards might seem like the easy option, but with soaring interest rates, they can quickly turn into a debt nightmare. Homeowners need to think long-term – consider the repayment terms and the overall cost of the loan before blindly reaching for their credit cards.”

So, what’s the alternative? McGrath suggests homeowner loans as a viable option for many. “They often offer much lower interest rates compared to unsecured borrowing, meaning smaller monthly payments and less strain on your finances.”

But what about these mysterious second charge mortgages? McGrath explains, “They might not be suitable for everyone, but they can be a game-changer, especially for larger renovations. My advice? Do your research, talk to a broker, and see what your options are. Don’t let your dream home turn into a financial nightmare.”