Fixed Rate Ended - Additional Funds Required

alidai

Hi,
Myself and my partner came to the end of our initial 2 year fixed deal on our mortgage in January, and have now moved on to the SVR.
We are looking to remortgage to raise some additional funds, and also to fix our payments for the foreseeable future (3 to 5 years i think).
Our figures are:
House Value = 130,000
Mortgage Balance = 97,000
Additional Funds Required = £7,000
I spoke to London & country this morning to discuss the situation, and the guy basically said to me that i would be stupid to try and raise additional funds this way, and to re-mortgage because the SVR i am on (3.5%ish) would raise to a fixed rate of around 6/7%.
Therefore it would be costing me 2% of my mortgage each year just to borrow that 7,000.
My initial thoughts are that i would like some certainty over what my payments are going to be for the next few years, however is getting a fixed deal a bad idea now, or should i be looking at some other deal?
Thanks
A

beecher2

As things stand your LTV is 75% so I do think it would be unwise to add to your mortgage as your LTV would increase to 80% which would mean more expensive deals. That's if your house value is realistic, and lenders agree with it! If you're wanting security then I'd fix, but not with the additional £7k.

Hopejack

Would you not be better to look at a loan for the £7k and just remortgage for the current outstanding amount?