Saturday 10 May Soaring house prices and low interest rates mean homes are once again the piggy banks from which owners are releasing wads of cash. Negative equity has almost vanished in the latest house price boom, according to estate agency Countrywide.

Remortgaging a property to release this often used to pay down credit card debts as well as finance spending on luxuries was a common feature of the last housing bubble. However, releasing equity from your home in this way comes with pitfalls.

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Council of Mortgage Lenders figures show that of the 6. However, with fears of another house price bubble in mind, is remortgaging to withdraw equity ever a good idea?

Mark Harris, chief executive of mortgage broker SPF Private Clients, has mixed feelings. This could add value to the property and avoid the need to move to a bigger home at a higher price and with all the expense of buying and selling such as agent fees, stamp duty, legal costs etc.

People considering remortgaging to raise cash also need to consider what will happen the next time they want to refinance. While mortgage rates are low now, they will inevitably rise. Those homeowners who do decide to remortgage to release cash won't find it as easy as it used to be.

New rules that came into effect on 26 April mean lenders are now doing a lot more checks on borrowers' income and outgoings to ensure they can afford their mortgage both now and in the future. It's not just first-time buyers and movers affected by the new rules; those remortgaging are too. For those who do decide to remortgage there are some decent rates around. Best buys include a two-year fix with HSBC at 1. Youth minister the Rev Michael Hunter, 49, lives in Hertford with his wife and three children.

He recently remortgaged to both have the security of a fixed rate, and to raise money for home improvements. We've stuck to that. We're getting our bathroom redone, adding a shower room and knocking down our conservatory and putting up a new one. Please choose your username under which you would like all your comments to show up.

You can only set your username once. For years we've built the wrong houses in the wrong places. We need to rethink the self-serving myths about the housing crisis, argues Paul Cheshire. International edition switch to the UK edition switch to the US edition switch to the Australia edition. The Guardian - Back to home. Withdrawing equity from your house was huge before the credit crunch.

But is it a sensible way to borrow? This article is 3 years old.

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