Need additional borrowing, but I am already on a fixed deal for 2 years...

Chris94

I'm on a first time buyer scheme where I own 60% equity in my flat and the government owns 40%. I could easily afford the repayments for the full 100% but unfortunately I did not meet the income requirements so when my initial deal came to an end I took out another deal to essentially half the interest rate.

Now a few months later I've found a new job with an income that would allow me to buy out the remaining equity. However, I'm still on this fixed deal till March 2021 and I believe my only options are "additional borrowing" seperate from my main mortgage with a stupid interest rate of 5% or thereabouts when my mortgage is 2.3%. Or I can pay the early repayment charge of 1k to redeem the mortgage and take out the full mortgage on a new deal or with another lender.

Seems a bit unfair when if I'd not renewed the deal a few months ago I could have taken out a new mortgage with the same lender at a reasonable interest rate.

Anyone been in a similar predicament? Did you find another way around it? Is negotiating with the bank for a better interest rate even a thing?

AnotherJoe

unfair LOL. The organization that lent you the money would have gone into a back to back deal to borrow at an appropriate rate to match yours (in the large, not individually obviously). So by getting out early they would lose as they have to pay their loan back. Thats why you sign a contract and thats why there's an ERC.

This is all down to you, dont blame someone else for the decisions you made, if you had a pay cut would you be looking to renegotiate on a higher rate?
If you can get a better deal that beats the old one including the ERC then do it. And no, negotiating with the bank for a better interest rate is not a thing unless your mortgage was for say £25M.