Can I remortgage and add 5k to loan?

crusty_toenail

Hi all,

I have a mortgage of 28k on a house valued at 180k.

I having been saving for a car and will have 10k saved at the same time as my mortgage deal with a & l comes to an end.

I would like add 5k to the mortgage when I remortgage so I will have a loan of 33k.

Is it okay to ask the new lender for the 33k?

When I spoke to a & l they said I couldn't add the extra 5k to my existing mortgage at my mortgage rate, the 5k would have to be at a higher rate, like a standalone loan.

My idea is to use the 15k to buy a new car that will last me 10 or more years.

Does this plan seem okay? What do you people think???:j

Thanks in advance,

crusty x

Jimbo1976

Yes you can ask the lender for £33k, though they will ask you what the extra £5k is for. You have plenty of equity. Are you sure you want to add the £5k to your mortgage? Whilst you have not told us what the term of the mortgage is, i suspect it will be more than the life of the car. You may find that it is cheaper to take out a car loan and pay it off over a shorter period. Whilst your mortgage rate will be cheaper you will be paying interest for a lot longer.

Eg a £5,000 loan at 7% over 5 years will cost £99pm and thus £5,940. A £5,000 loan at 4% over 10 years will cost £51 and thus £6,075 over the 10 years.

Can't you just buy a car with the £10k you will have saved?

StuC75

wouldnt most lenders have minimum lending amounts for the mortgage anyway?? seem to recall most having minimum as £40k anyway?

What is the current rate that you have the 28k mortgage at? if it is really low or svr, then if you move mortgage you would move all of it to the higher rate elsewhere...

so the more savvy approach would be to finance the extra 5k by some other means..

All a&l are saying is that the 5k extra would have to be on a different deal to your current deal, which you imply is also coming to an end anyway..

crusty_toenail

My mortgage is 28k @2.99%, term 23 years. (variable). We are mid thirties so don't mind term of 23 years as we are not moving again (in forever house).

I know it makes more sense to buy a 10k car but I want the extra 5k to get a really good crossover family car.

mambo69

what is a cross over car?

StuC75

mambo69 wrote: »

what is a cross over car?

use google / wiki...

A crossover (or CUV: crossover utility vehicle) is a vehicle built on a car platform and combining, in highly variable degrees, features of a sport utility vehicle (SUV) with features from a passenger vehicle, especially those of a station wagon or hatchback.

mambo69

you can buy a 2008 CRV for less than ten grand so why spend more than you have saved?

mambo69

one thing to think about is the majority of people change a car after 3 or 4 years, not ten but you will be paying 1/3 back over 25 years. how much do you save? maybe if you want a new car get 0% finance instead of adding to a mortgage