Borrowing more v Borrowing back overpayment

pollyanna24

I will be buying my brother our of our property around January time. Been looking at my options.

I will be taking on the existing mortgage (around £105K) in my own name and borrowing an additional £90K (the calculators say I can do this).

We have overpaid £54K and something on Nationwide's website said that I could borrow this back rather than taking on an additional mortgage (although in my case, I would have to take on an additional mortgage anyway in order to give my brother his equity).

I was thinking of leaving the £54K where it is and just taking out an additional mortgage of £90 so that the overpayment would still be there in the future if ever I did get into difficulties with the mortgage (obviously I hope this wouldn't happen).

So additional mortgage of £90K or borrow back overpayment and additional mortgage of £36K?

somethingcorporate

Depends on the rates. How are they for borrowing back the £54k (probably at your prevailing mortgage rate) compared to the rate on the new loan (which may be higher or lower depending on your current deal).

Without all the info it's impossible to tell.

pollyanna24

somethingcorporate wrote: »

Depends on the rates. How are they for borrowing back the £54k (probably at your prevailing mortgage rate) compared to the rate on the new loan (which may be higher or lower depending on your current deal).

Without all the info it's impossible to tell.

I'm currently on 2.5% (tracks the base rate +2%).

Hoping that rates will still be low when I come to get an additional mortgage and as I will own 40% of the house, think I will get a good rate.

Thinking of the 2.34% 5 year fixed rate (Nationwide) if it's still around for the additional borrowing.