Remortgage and additional borrowing! Help Please!

confusedhomemover

My fixed rate mortgage comes to an end in March and i'm trying to remortgage at the minute.


We were hoping to add £12,000 to our mortgage at the time of remortgage to pay for a car and kitchen refresh. I naively thought I could add this onto the mortgage but after speaking to my current lender - BOI - they said I have to take it as additional borrowing which has a higher interest rate than the new mortgage deal.


New mortgage deal (5 yr fixed) 2.37%
Additional Borrowing of £12000 4.59%


We currently have 76% LTV


I've shopped around a bit and think this is a good mortgage deal (£0 product fee/arrangement fee) but I don't know if we are being screwed with this additional borrowing rate.


Is it better for me to move to a completely new provider asking for a new mortgage amount of the existing mortgage debt + £12,000 or will any other lender also see this as additional borrowing???


Please help, i'm so lost in this now!


Thanks x

foxy-stoat

Try an unsecured loan to see what rates they give you.

confusedhomemover

Foxy-stoat thanks but I did try them first but the monthly repayments are too high. I need to keep monthly outgoings as low as possible for the next few years.

foxy-stoat

confusedhomemover wrote: »

Foxy-stoat thanks but I did try them first but the monthly repayments are too high. I need to keep monthly outgoings as low as possible for the next few years.

Can a new kitchen wait for a few years when you are more financially stable?

Buying a car with equity paying interest for more than 5 years isnt the best idea.

user1168934

foxy-stoat wrote: »

Can a new kitchen wait for a few years when you are more financially stable?

Buying a car with equity paying interest for more than 5 years isnt the best idea.

Obviously I don't know about OP's situation but these were exactly my thoughts.

confusedhomemover

I need a new car before my one breaks down on the side of a road, this is my only option. I can't afford the repayments of a 5 year loan. I know over the longer term this will cost more in interest!

With all due respect does anyone know the answer to my question??

user1168934

I am no expert but I was trying to do something vaguely similar a few years back and met my mortgage broker to discuss ... long story short ... I think most lenders will see this as you borrowing additional money against your property (for whatever reason) and they would actually want to know that reason. Kitchen might be alright as it a home improvement but some might not like the bit about the car. But this is not to say that they will not lend it to you. Every lender works slightly differently (in my limited experience).


The best thing you can do is go and talk to a whole of market mortgage broker, especially when it has a potential to save you a substantial sum in interest alone. They won't charge you any money so seems like a no brainer to me.


Hope that helps.

foxy-stoat

confusedhomemover wrote: »

I need a new car before my one breaks down on the side of a road, this is my only option. I can't afford the repayments of a 5 year loan. I know over the longer term this will cost more in interest!

With all due respect does anyone know the answer to my question??

So is the car your are currently driving limping around just waiting to stop at the side of the road and cannot be repaired?

Good luck and I hope you get the answers you are looking to hear.