Further Advance Additional Borrowing with Birmingham Midshires OR 2nd Lender for the Same Property?

Victoria17

Hello,

A few weeks ago I talked to my Mortgage Advisor because I wanted to borrow more money from a property that I own. It's already mortgaged, with Birmingham Midshires.
He told me the way to go was to get further funds from the same lender. The rate was 2.58%. 

Then when I was ready to go ahead and start sorting it out, a couple of weeks ago, my adviser told me that actually, the rate had gone down to 1.98% - despite the Bank of England increase!  I was very happy with that.

However, last week, when we were ready to submit the formal application, I got an email from my mortgage adviser informing me that unfortunately the rate had gone up to 2.98%. 

I don't understand how it could have gone down by 0.5% from December to January, and then a week or two later, randomly gone up by 1% from one day to the next- none of it makes sense. Any ideas?

2.98% seems high to me, for 25% LTV. Do you think if I wait and ask my Mortage Adviser to keep an eye on the rates it may go down again, soon? It all seems so erratic and not in line with what the bank of England is doing, it's confusing. 

Or do you think I could take on a second mortgage with another lender, maybe? Any experience with that?

[The property is worth £335,000. I have a 165,000 BTL mortgage on it, fixed for another 4 years 2 months, at a 1.76% rate. I want to borrow £85,000 more on it.]

Thank you for your help :-)

kingstreet

BM Solutions further advance rates are visible here on page 5;-

https://www.bmsolutions.co.uk/pdf/mortgage_product_guide.pdf

I suspect the wrong card was used to get that 1.98!

Victoria17

kingstreet said:

BM Solutions further advance rates are visible here on page 5;-

https://www.bmsolutions.co.uk/pdf/mortgage_product_guide.pdf

I suspect the wrong card was used to get that 1.98!

2.98% is definitely correct, thanks for the link... But you might be right, there might have been a mistake made because a sudden 1% increase is really surprising to me... It's such a huge increase! Oh well if that's what it was, a mistake, then at least it makes more sense :-D

amnblog

2.98% is the 75% no fee rate.

Your broker has definitely looked at the wrong rates range previously.

A remortgage is not an option as you are looking at a 5% early repayment charge.

A second charge mortgage with a specialist is not likely to give you a result on cost.

The first thing I would consider is affordability as your rental on the property may cap your borrowing, especially if you are a higher rate tax payer.

Victoria17

amnblog said:

2.98% is the 75% no fee rate.

Your broker has definitely looked at the wrong rates range previously.

A remortgage is not an option as you are looking at a 5% early repayment charge.

A second charge mortgage with a specialist is not likely to give you a result on cost.

The first thing I would consider is affordability as your rental on the property may cap your borrowing, especially if you are a higher rate tax payer.

Thank you for confirming that it was a mistake. It's good to know that lenders are not this outrageously unpredictable with their rates. 
The property is currently being let for 1400 pcm and I'm not a higher rate tax payer. I want to release some money to use as a deposit for another property investment... Which will then put me at the top of my tax bracket (20%) - but not over. 
Maybe I should go with the Further Advance for 2.98%. It's a high rate but BM Solutions have said they would lend me the money.