Borrowing for home improvement - wil I lose current mortgage rate?

stevelondon88

ylesia wrote: »

I have recently looked into this with Nationwide, I am on their 2.5% BMR. the reply I got was that if I was only borrowing back what I had overpaid previously then all borrowing would remain on the BMR but if it was additional borrowing then the whole mortgage would have to be on a new deal and I would lose the BMR.

That's exactly what I want to avoid.

No surprise that they would love us to lose the BMR rate but I'm hoping that they can't force this.

stevelondon88

kingstreet wrote: »

I'd like someone to take this on with a formal complaint. I'd heard of lenders using such arguments to take people away from rates they don't want to lose.

It's my understanding if you approach Nationwide for additional borrowing when you're on a fix, for example, it's policy to leave the fix alone and to provide additional borrowing on a different product, using a separate sub-account.

The additional borrowing application form asks for the new product you've chosen, the amount, the term, the repayment method. Nowhere does it mention you're making any changes to the existing mortgage.


So, why is it the only time the existing mortgage is affected is if you're on BMR?

I'm going to ask our Nationwide BDM about this, next time I speak to him.

Please let me know if you find out anything!

kingstreet

I will. I got an "out of office" reply.

I take it you're with Nationwide then, not C&G?

It was going to be one, or the other!

sw67

I have the lloyds tsb 2% above base variable mortgage and have applied for additional borrowing for an extension. I have extended the term and kept the 2% part and additional borrowing is fixed for 3 years.

I can overpay 10% of additional borrowing and 100% of current morgage.

No fees for fix

Thrugelmir

stevelondon88 wrote: »

No surprise that they would love us to lose the BMR rate but I'm hoping that they can't force this.

Unlikely to force change as is. However may be condition of a further advance.

Which then forces borrower to accept higher rate or change lender.

Jo.G

I will be looking into this over the next few weeks. We are with C&G with a tracker mortgage of 0.5% (from memory) above the BoE base rate for the life of the mortgage. I'm assuming there's no way we will be allowed to borrow extra at the same rate. If we can't secure additional funding to run seperately alongside the existing mortgage, we probably wont go ahead.

Thrugelmir

Jo.G wrote: »

I'm assuming there's no way we will be allowed to borrow extra at the same rate.

No possibility.

You'll need to borrow at current rates. At whatever rate is quoted for home improvements.

kingstreet

I've spoken to our BDM today. She's been away from work due to illness.

She assures me an existing mortgage on BMR does not have to be changed to a new product if additional borrowing is required.

The current mortgage remains as it is and additional borrowing is offered on a new product from the additional borrowing range, 2.39% to 4.29%. Examples can be found here, by clicking the "additional borrowing" dropdown, in the customer type box;-

http://www.nationwide-intermediary.co.uk/products/product_finder

You will get the complete range of fixed rates and trackers, by leaving the sliders unchanged

stevelondon88

kingstreet wrote: »

I've spoken to our BDM today. She's been away from work due to illness.

She assures me an existing mortgage on BMR does not have to be changed to a new product if additional borrowing is required.

The current mortgage remains as it is and additional borrowing is offered on a new product from the additional borrowing range, 2.39% to 4.29%. Examples can be found here, by clicking the "additional borrowing" dropdown, in the customer type box;-


You will get the complete range of fixed rates and trackers, by leaving the sliders unchanged

Good to know. Thanks.