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Second mortgage / home owner loan
shinypenny
Posts: 24 Forumite
My partner and I bought our house in September 2012 with a 40% deposit and are on a decent BBR lifetime mortgage with 17.5 years left to pay.
We would now like to improve our home with a new kitchen extension and as we don't quite have enough in savings to cover the cost, we are considering borrowing £20k over 5 years.
Our current mortgage provided has agreed in principal to additional lending offering us a 2 year fixed at 2.59% with no arrangement fees. We don't mind securing this additional lending on the house and have passed the bank's 'affordability criteria'.
My question is, how do I determine if this is a good deal? I've seen unsecured loans offered at 4.5% so it's obviously cheaper lending but how do I find out if other mortgage lenders offer 2nd mortgages and their rates/fees? All the 'best buy' tables seem to be focussed at new mortgages or remortgages. Thanks for any advice!
We would now like to improve our home with a new kitchen extension and as we don't quite have enough in savings to cover the cost, we are considering borrowing £20k over 5 years.
Our current mortgage provided has agreed in principal to additional lending offering us a 2 year fixed at 2.59% with no arrangement fees. We don't mind securing this additional lending on the house and have passed the bank's 'affordability criteria'.
My question is, how do I determine if this is a good deal? I've seen unsecured loans offered at 4.5% so it's obviously cheaper lending but how do I find out if other mortgage lenders offer 2nd mortgages and their rates/fees? All the 'best buy' tables seem to be focussed at new mortgages or remortgages. Thanks for any advice!
0
Comments
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You will not get close to the terms being offered.
Your only consideration is that the shorter the term, the less you will pay back in total for the borrowing.I am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it.This signature is here as I follow MSE's Mortgage Adviser code of conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
If you go to another lender, they will be able to take only a second charge and the accompanying rate will be much higher.
Your existing lender is able to lend more within its first charge, so you are getting normal mortgage rates. You will not get better.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
Thanks guys! Just waiting for the paper work to come through now.0
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