Mortgages and Shared Ownership

MarmotV

I intend to buy a shared ownership home with a 5-year fixed rate mortgage as current interest rates are low.

I earn £25k and have a large deposit, so can get a mortgage of £100k (i.e. 4 x salary of £25k).

Next year, my salary will rise to £35k and I want to increase the mortgage to £140k (i.e. 4 x salary of £35k) and use the extra £40k to buy a larger share of the home. 

1.       Would I have to change the entire mortgage and lose my 5-year fixed rate?

2.       Can I get a separate mortgage for the extra £40k?

3.       Could I instead get a separate personal loan of £40k to buy a larger share of the home?

Anyone done this before? (I know about the pitfalls of shared ownership; I just want to understand the way the mortgaging will work).

kingstreet

If you ask your current lender for a further advance for the purchase of the additional share, you will have a sub-account in addition to your current mortgage account at a different rate. You will retain your current borrowing/rate in the main account.

If you remortgage to a new lender you will raise all the money you need for the purchase and will repay the existing mortgage, losing the existing rate and paying an ERC.

You might be able to get a £40k personal loan but usually over a much shorter term making the cost prohibitive.