Borrowing additional funds - how does it work?

kasqueak

Hi all, I bought my house in 2020 on a 5yr fixed rate mortgage with Halifax. 

With working from home now being permanent for me and my OH we want to add an extension or loft conversion to the property. 

If I’m reading it right, it seems I can borrow additional funds from the Halifax that might allow me to do these works. It allows me to put in a max of 25yrs repayment term
for the additional money borrowed. 

If, for example, I borrowed £20k now and set it to repay over 25yrs - how does it work when i come to remortgage when my fixed rate ends?

Could I remortgage and incorporate that 20k loan? 

i.e. outstanding mortgage is 150k, plus additional loan at 20k can I remortgage for 170k?

So then I’m not paying the 20k back over 25yrs I’m just making the monthly repayments more affordable right now knowing my home will increase in value after the works have been done and before I remortgage? 

Sorry if I’ve badly explained! Any help appreciated. Thanks in advance. 

enthusiasticsaver

You can align them or let one run at SVR until the other deal expires.  So borrow the additional on a 3 year term and then get a deal for them both in 2025. 

kingstreet

If you remain with Halifax you will always have two sub accounts and you may not be able to align them without spending time on SVR so you may be looking for customer retention products at different times.

If you remortgage (this means a new mortgage with a new lender to repay all your Halifax secured borrowings) this will be possible but again aligning the two end-dates of your different tranches of borrowing may be difficult and result in you paying some early repayment charge (ERC).