Further advances with your existing provider

adamsmt76

Hi all,

Our discount term is up in August and we are looking to take on some additional borrowing when we remortgage.

Our current provider has suggested taking out a mortgage based on ONLY the current balance. Then applying for a further advance with them for the additional borrowing. This would obviously give us a better rate on the actual mortgage balance due to the lower LTV but they couldn't confirm what rate the additional borrowing would be at until going through an application.

The alternative is of course just applying for the whole sum (balance + additional borrowing) with a new provider but at a worse rate due to the higher LTV.

I appreciate that without knowing the rate applicable to the additional borrowing with our existing provider it's impossible to know but as a general rule of thumb are further advances a good idea in comparison to remortgaging for the whole amount elsewhere?

Thanks in advance for any help.

Matt

amnblog

You need to compare your three options:


Further advance (extra with current lender)
Remortgage (whole lot with new lender)
Secured loan (extra with new lender)


Each case is different

termhero

adamsmt76 wrote: »

Our current provider has suggested taking out a mortgage based on ONLY the current balance. Then applying for a further advance with them for the additional borrowing. This would obviously give us a better rate on the actual mortgage balance due to the lower LTV but they couldn't confirm what rate the additional borrowing would be at until going through an application.

The alternative is of course just applying for the whole sum (balance + additional borrowing) with a new provider but at a worse rate due to the higher LTV.

I could be wrong on this, but your LTV is based on your total mortgage, each sub account is not treated as it's own, so the LTV will be the same with your current provider as others (barring valuation differences of course).

As I said I could be wrong, but I have 2 sub accounts, and my LTV as displayed by my provider's is these accounts combined (both different rates as one is the original, the second is additional borrowing around 2 years ago).

adamsmt76

In our case the lender offered us one rate at the LTV applicable for the mortgage balance and then a marginally higher rate for just the additional borrowing (as this took us to a higher LTV) which seems like a really beneficial way of doing things.

Let_Us_See

adamsmt76 wrote: »

I appreciate that without knowing the rate applicable to the additional borrowing with our existing provider it's impossible to know

Come back with actual figures, otherwise pointless speculating.

TBeckett100

OP do try and stick to one thread