Additional Borrowing

Additional Borrowing

What is a further advance/ additional borrowing?

A further advance is when you take on more borrowing from your current mortgage lender.

This is typically at a different rate to your main mortgage.

Additional borrowing this way can make sense if:

  • your lender’s further advance is competitive
  • perhaps you don’t want to remortgage or switch lenders
  • there may be an early repayment charge on your current mortgage

You can spread your payment over a long term and your interest rate should be lower than a personal loan.

But always check the market to see if you can get a better deal before committing.

 

When a further advance might make sense

There are two situations when a further advance might be suitable:

  • to fund home improvements
  • to raise a deposit for a second property, perhaps as a buy-to-let investment.

 

Are further advances a good idea for paying off debts?

Increasing your mortgage for home improvements might add value to your property but using a further advance to pay off debts is rarely a good idea.

Consider the alternatives first.  Stop and take advice.

The additional loan would be secured on your property, which you could lose if you weren’t able to keep up your extra loan payments.

Even though interest rates on mortgages are normally lower than rates on personal loans – and much lower than credit cards – you could end up paying more in the longer term.

Before looking to borrow against your property, try to prioritise and clear your loans.

 

A MORTGAGE IS A LOAN SECURED AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBT SECURED ON IT.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. 

SECURING SHORT TERM DEBTS AGAINST YOUR HOME COULD INCREASE THE TERM OVER WHICH THEY ARE PAID AND THEREFORE INCREASE THE AMOUNT PAYABLE.

Comments are closed.

  • Request A Callback


      Contact Method & Time

      To view our Privacy Policy, please click here. We will use your name, email address and contact number ('personal information') to contact you about the services you have requested or respond to an enquiry you have submitted, which will require us to share your personal information with our advisers. For further information on how your information is used, including disclosure to third parties, how we maintain security of your information and your rights in relation to the information we hold about you, please see our Privacy Policy.

      Email communications are not secure and for this reason Mortgage Solutions cannot guarantee the security of the email, its contents or that it remains virus free once sent.