DESPITE the threat of increasing interest rates, people are borrowing more against their homes than ever before.

In just 10 months the Bank of England has raised base rates four times - but that hasn't stopped the average remortgage rising in the same period by almost 10%.

The average remortgage is now £122,5411, up 7.19% on levels a year ago, according to money website, Moneyextra.

And its new mortgage market study has revealed a worrying trend that people may be releasing equity to service debt - trapping them into paying greater interest in the long run.

According to Robin Amlot of Moneyextra.com, the increase also reflects past rises in house prices as people switch deals after their introductory rate mortgage ends.

He said: "Recent reports from the retail sector, including disappointing sales growth figures from both Tesco and Sainsbury, would suggest that we're not spending this money on goods and services but using it to reduce other debts.

"It seems many people are opting to switch expensive credit card debt and overdrafts into long-term, low interest rate mortgage debt.

"Of course, this means they could be paying far more interest in the long run but it is one way of reducing immediate monthly outgoings."

In the broader housing market, pressure is still focused on first-time buyers.

According to Moneyextra, the average value of property sought by first-time buyers rose by 8.91% to £183,317 while the average first-time buyer mortgage rose by just 2.99% to £139,935. Overall average property prices rose by 6.05% with an average house price at £228,754. The average mortgage rose to £139,095, up 2.95%.

In Scotland the average house price has gone up from £69,961 in 2000 to nearly £139,836 last month. Timesfile THERE are three reasons to remortgage - for a better rate, to consolidate shorter-term debts, or release equity from your home to pay for improvements. As well as paying interest for a much longer period, there could be a penalty to leave the existing mortgage. Other fees include a lender's booking/arrangement fee, a valuation fee, solicitor's fees and possibly a higher lending charge for a high loan to value ratio.