Mortgage - additional borrowing - same lender?

[Deleted User]

I suppose you'd have to really but, am I right in saying that, unless you move the whole lot, any additional borrowing has to be with the same lender?

i.e. You can't have £100K on your main mortgage, then get £20K with someone else.

I've got a GREAT mortgage at base rate + 0.75% but they want 4.59% for any additional lending......

I guess I shouldnt complain :-)

silvercar

You can take a secured loan, which is effectively a second charge or mortgage with anyone. I suspect the rates will be lower with your existing lender.

[Deleted User]

Hmmm. I thought so. I think secured loan as you say would be higher. Current lender has offered 4.59%.

[Deleted User]

Existing lender has offered 4.09%.

Still a bit confused. Can I go to another lender for this extra?

Or would that only be in the form of a secured loan if I did it this way?
i.e. I cant have part of my mortgage with one place, part with another?

_Andy_

You can't have another mortgage with another lender - as they would want the 2nd charge.

I very much doubt you'll find a 2nd charge secured loan at less than 4.09

amnblog

Paul

You cannot have two 'first charge' mortgages on the same property.

The first charge lender has first call on the funds if the property is sold.

You can have a first charge and a second charge with two different lenders.

Then the second charge lender is behind the first charge lender for funds when the property is sold.

Your first charge lending is generally referred to as your mortgage, a second charge as a secured loan ( as it is secured on your property).

A second charge lender is very unlikely to offer the kind of rate your current mortgage lender is offering (you current lender will add the additional lending to their 'first charge').

In short, to keep your current excellent rate take the extra with your current lender.

amycs

I'm looking to do exactly the same, as we're planning an extension. I have a really good life time tracker, and if I want to keep that, I need to take additional lending from existing lender. Rate isn't too bad with cheapest at 3%, but they'll only lend me a max 80% compared to 90% when I took out loan 5 years ago. Is means I won't get much out, but on the plus side there's no revaluation fee, just a product fee.

What you need to do, is calculate overall cost of your existing loan plus further loan at 4.59% versus the best you can get on the market for all of it. I've done this, but found existing deal too hard to beat, as trackers now have a massive margin.

Good luck!

[Deleted User]

amycs wrote: »

I'm looking to do exactly the same, as we're planning an extension. I have a really good life time tracker, and if I want to keep that, I need to take additional lending from existing lender. Rate isn't too bad with cheapest at 3%, but they'll only lend me a max 80% compared to 90% when I took out loan 5 years ago. Is means I won't get much out, but on the plus side there's no revaluation fee, just a product fee.

What you need to do, is calculate overall cost of your existing loan plus further loan at 4.59% versus the best you can get on the market for all of it. I've done this, but found existing deal too hard to beat, as trackers now have a massive margin.

Good luck!

Sounds same as me. Yeh my tracker is good too.

Luckily, I've got tons of equity so LTV is not a problem for me. In fact, they said I could have up to £50K extra. {{gulp}}

Bit annoying that the extra is going to 4.09% but there we go. Like you said, gotta compare with cost of moving whole lot.

[Deleted User]

Just had a quick check on moneysupermarket. Even if remortgaged the whole lot and took a special rate for 2 years, it'd still cost £20-£30 a month more than my BS+1.1% main and 4.09% extra borrowing. After the special offer period it'd cost TONS more.

Of course, I could remortgage again every two years but, of course, theres a cost to doing this as well usually. (Loan fees, solicitors fees)