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Question about mortgage + bank loan
Biffins
Posts: 7 Forumite
We have been offered a mortgage at 80% LTV at 3.38% tracker (repayment only) and 75% LTV at 2.29% tracker (either repayment or interest only). We can currently afford a downpayment of about 22-23%. Would it make sense for us to borrow the 2-3% separately as a bank loan, get the 75% LTV package at interest only and aggressively pay down the bank loan so we have the much better rate overall? Is it possible to do this if the numbers make sense (borrow a bank loan to make an equity payment on a mortgage......?)
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Comments
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It would probably make sense, but.....................
Few lenders will accept a borrowed deposit, and you would be unlikely to get a 75% interest only mortgage, unless you already have a realistic repayment vehicle in place (not "I will be starting a £10 a month ISA" or "I will be inheriting/winning the lottery")I am a mortgage adviser.You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0
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