Mortgage additional borrowing rate high

crusty_toenail

Hi,

I need some financial help as I'm a bit thick.

I have a flexible mortgage with A&L at 2.99%, balance 23k. I have been overpaying this mortgage for the past 3 years and now have a credit balance on the account.

I have decided to get an extension to the property and phoned A&L yesterday and they told me the additional money I wold need to borrow for the extension would be at a higher rate of over 6%, but after I borrowed the money I could come back to them and get a better deal as they didn't want to loose me as a customer.

I thought the rate of additional borrowing a bit high? Does anyone know what I should do? I have no early redemption with this mortgage so can go somewhere else if anyone has any ideas?

My house is probably valued at 170k and 200k with the extension.

Thank you in advance,

Crusty:beer:

crusty_toenail

anybody? need help please!

getmore4less

How much are you trying to borrow?
How much will your income support?

amnblog

It is fairly common for lenders to request a higher rate for a further advance.

The best route for you depends on a number of factors, not just interest rates but, why you are building the extension, what you intend longer term, if you will continue to overpay.

Worth you paying a broker for some sensible advice to avoid unecessary cost later.

Thrugelmir

In essence the lender is saying we'll lend you the money. Do the work to extend the property. Then we'll reconsider.

The lender is ensuring you spend the money on the intended purpose.

dimbo61

Time to look at the big picture !
You have plenty of equity and should get the best rates on the market ie 3% fixed for 5 years.
Consider offset so you borrow the full amount you need and repay existing mortgage, put excess money in offset account to pay for building work, materials as and when needed
Simples !

crusty_toenail

off set mortgage best deals where do I find them? I do like this idea x