Mortgage and Secured Loan Question

cambsno

If my property is worth £250k, with outstanding mortgage of £195k, I have £55k of equity, so will easily be able to remortgage in a good deal.

If I was to have a £50k secured loan, effectively only £5k would be 'free'. When remortgaging then, would a lender see me as having on £5k deposit, so would need a 100% mortgage, or would they still see me as having around 20% deposit?

silvercar

Lenders usually look at loan to value ratios, so your "deposit" would be around 20%. This may open up more deals, but some lenders may not be prepared to lend to you if that leaves you with so little equity on your property.

But, when considering how much they are prepared to lend you, they look at other commitments. So the £50k secured loan could limit the amount of money that are prepared to lend you.

The lender of your secured loan will also need to agree to staying in second place on your home charges.