How does additional borrowing work?

PaulC5

We are coming to the end of our 4th year on Help to Buy (2x 2yr Mortgage Fixes) Due to the last 2 tax years being lower than normal for me we cant add the Help to Buy loan to the mortgage this time as we intended too.
So that I understand all our options and can make an informed decision I want to know how additional borrowing works if you are in a fixed mortgage.
Our current lender sees our LTV at 55% so would be nice to take advantage of a long term, low interest rate (5yrs at 1.39%)
If my circumstances change and we can borrow enough to pay back the Help to Buy say in a year or 2 from now. Can we get additional borrowing from any other lender? Are there any additional cost for this, Legal fees etc?
If borrowing additionally from current lender, do they offer the same rates based on what the additional borrowing would make your LTV? Do they keep it separate to your main mortgage like a sub account? Is it advisable to try and get them to align fix terms lengths so at least in the future you can consolidate them into one?

ACG

If you switch your current balance now, you will tie in to whatever rate your current or new lender offer you.
If you want/can wrap up the HTB loan at the same time, they will offer you whatever deal(s) on the full amount. 
The alternative would be switching your current mortgage to a new deal at whatever rate(s) are available and then either now or down the line take out a secured loan for the HTB balance. The secured loan will be at a higher rate - best case scenario would be a rate of around 4.5%. 

PaulC5

So basically our best options are pay it off now by adding it to the mortgage (fails on affordability)
Fix current mortgage for 2 years, pay interest in the second year on the Help to Buy (dead money) and hope affordability is accepted when that comes to an end and add it on in the 3rd year with a remortgage.
Fix current mortgage for as low and as long as possible and take out additional borrowing at a later date but at a much higher interest rate.

shaggyuk

Let me first clarify, I am not a mortgage advisor but I am also in a similar situation (2 yrs fixed HTB mortgage period is coming to an end in October, 2020) and based on my research here are the options I have got.

(A) Remortgage by taking additional borrowing at the end of fixed period - I may not be able to pass affordability checks as well although this was my preferred option as I could consilidate additional borrowing with my current product and could easily remortgage to another lender in future as a single debt.

(B) Take out 5 yrs fixed product on existing mortgage - I could go to my lender anytime within 5 yrs and ask for additional borrowing sighting reason as to pay off HTB Govt equity loan and subject to affordability checks I would be offered another product (sub product to main mortgage account) based on total LTV as per the valuation at that time. So yes interest rate may be little higher but may be in region of 1.5% - 2.5% assuming lending market don't change much in next 5 yrs. The most important thing is to align fixed rate expiry of new sub product (additional borrowing) with the main product fixed rate expiry. This will enable you to change lender after both products fixed rate comes to an end without paying any potential ERC.

(C) Take out 2 yrs fixed product on existing mortgage - If it sounds difficult to maintain additional borrowing sub product separately as above then better to follow option (A) after 2 yrs from now subject to affordability checks.

I hope it will help to decide the best possible option for you.

Good luck