Borrowing less than originally agreed - new rates?

tyler80

If a mortgage is agreed for x amount and then the total amount to be borrowed is reduced, say because of a new price agreed after valuation, do the rates still apply from the original date of application?

kingstreet

Yes. You'd keep the rate on the lower amount you now need.

tyler80

Thanks, just pondering. The rate for the LTV bracket we went for has increased whilst the rate for the next bracket down (which we didn't go for as it was a stretch and the rate difference meant it made more sense to keep that money in reserve) has decreased.

kingstreet

tyler80 wrote: »

Thanks, just pondering. The rate for the LTV bracket we went for has increased whilst the rate for the next bracket down (which we didn't go for as it was a stretch and the rate difference meant it made more sense to keep that money in reserve) has decreased.

Even if you fall into a lower LTV bracket and might qualify for a lower rate they are unlikely to let you have it. They charge fees to try to stop people jumping ship during the application process.

For example, even if you cancel your application and reapply to Northern Rock they will still only give you the product you applied for originally.

tyler80

Just have to remember the fact that we've got a better rate than if we'd applied today and ignore the fact that we could have put 25% deposit down instead and saved 0.3%. That's life