Can I get a 2nd Mortgage with another lender?

Thmas_Covenant

We have a mortgage at the moment that was fixed until last year and reverted to variable which is 1.6% above Base Rate, which is excellent. We have around 65% equity in the house.
We want to get a mortgage for an extension, that is around half again the current mortgage, so our equity would drop to around 50% against the outstanding mortgage - so still a fairl good position.
Our current lender will not let us add to the current deal and only has 2 products that we could take for the new element, leaving the existing on the SVR. The new deal they are offering aren't that competitive. they could also offer us further deals on a complete new mortgage, again, not as good as what we are currently on.
My question is, can I approach another lender for the amount we need for the extension, them being 2nd in line in terms of security of the house to pay in the event I don't? Are mortgages like that available? I would hope they would be, as even though they would be 2nd in line in terms of security, the house will always be worth enough to pay of both debts, easily.
Thanks (hope its clear...)

Thrugelmir

A second mortgage would mean borrowing at a far higher rate than a standard product. Mainstream lenders do not lend on second mortgages. The higher interest rate reflecting the additional risk to the lender.

What's the reason behind your current lender falling short?

Thmas_Covenant

Thanks
Basically we want to retain the current decent SVR, and can only do this for the current amount, not the new amount. We can either get the new amount on one of their standard packages, which aren't that competitive, or trasnfer the whole lot to one of their standard packages, which again we could find better elsewhere.
The ideal is, retain the current mortgage and get the best rate we can on the new one - looks like we will have to go for one of their deals.Thanks

Thrugelmir

The alternative is to stay on your existing mortgage product and save for a while.

Dave_Ham

Without the figures I cannot calculate this, but what you need to do is work out what the new loan with your existing bank will cost you per month. This will be guaranteed to be the cheapest "2nd charge" option and then add this to your existing great base rate + mortgage you have.

On a side note, I love how expectations have changed in the last few years - they have probably offered you a 4-5% rate and now that is "not that competitive" 4 years ago people would have bitten your arm off for that and stable PAYE employment has not necessarily changed everywhere...

Take figure A and cost it against a whole new mortgage at a rate of around 3%, which will be achievable subject to LTV and other variables stacking up and then see what is cheapest.

Sometimes the very low SVR's are a red herring when trying to get a further advance from the bank, obviously depending upon values involved.

Good luck

getmore4less

Thmas_Covenant wrote: »

Thanks
Basically we want to retain the current decent SVR, and can only do this for the current amount, not the new amount. We can either get the new amount on one of their standard packages, which aren't that competitive, or trasnfer the whole lot to one of their standard packages, which again we could find better elsewhere.
The ideal is, retain the current mortgage and get the best rate we can on the new one - looks like we will have to go for one of their deals.Thanks

What rates are they offering?