5.84% SVR for a further advance on mortgage - we 'don't qualify' for anything else!

thetigerwhocametotea

We want to borrow another 25k for home improvements. Have lots of equity in property so borrowing been approved no prob.

WestBrom will only give us the extra £25k at 5.84% variable. The first part of our mortgage (approx £190,000) is currently tracking BofE base rate +.99% - which we are overpaying madly while we can.

5.84% seems incredibly high as they have fixed mortgages for new customers @ 3.99%, but they say all they can offer is 5.84% to us.

Any advice on what we should do?

opinions4u

thetigerwhocametotea wrote: »

We want to borrow another 25k for home improvements. Have lots of equity in property so borrowing been approved no prob.

WestBrom will only give us the extra £25k at 5.84% variable. The first part of our mortgage (approx £190,000) is currently tracking BofE base rate +.99% - which we are overpaying madly while we can.

5.84% seems incredibly high as they have fixed mortgages for new customers @ 3.99%, but they say all they can offer is 5.84% to us.

Any advice on what we should do?

You need to work out the average rate on your mortgage and then compare it against deals from other lenders.

If I've understood right, you will end up with:

5.84% on £25k
1.49% on £190k

So the average rate is 1.996% variable, which is pretty good - assuming you are happy on a variable rate.

I'd probably go with that, as long as you can ensure that any future overpayments come off the SVR part of the overall loan.

If your tracker is due to run out in the near future then remortgage elsewhere sooner rather than later.