Borrowing more money

Kevin2022

Hi All, 

We currently have mortgage with Lloyds bank balance of 135k, we wanted to borrow another 40k in order to pay off 2 personal loans and get the new roof. 

Lloyds bank said that the 30k of the borrowing would have to be over 9 years as it's debt consolidation and only 10k can go on the normal mortgage term. which basically means that my repayments would be much higher then I expected. 

If I go ahead I will end up paying around £400 a month on top of my current mortgage payment which total would br £1,000 a month. Now that is a lot as when I checked online a repayments on mortgage of 175,000 would come to around £800 per month. 

My question is If I go ahead with Lloyds get the 40k pay off the 2 personal loans, and then If I were to go to another mortgage provider and asked for re-mortgage I could potentially end up paying £800 a month for the 175k mortgage as It will not longer be classed as debt consolidation? that is at least what I think. 

Any suggestions are much appreciated. 

//Kevin 

K_S

Kevin2022 said:

My question is If I go ahead with Lloyds get the 40k pay off the 2 personal loans, and then If I were to go to another mortgage provider and asked for re-mortgage I could potentially end up paying £800 a month for the 175k mortgage as It will not longer be classed as debt consolidation? that is at least what I think. 

@kevin2022 The term cap on debt con is a Halifax/Lloyds policy afaik. But you are right, if you do it in two steps (further-advance debt-con followed by a remortgage to another lender later on), the second step would be treated like a normal like-for-like remortgage.

Of course, depending on the time period between the further-advance and the remortgage, you may have an ERC to pay.

Kevin2022

Thank you for a quick reply. 

That's great, I will do a little more research & see how much ERC I would have to pay and take it from there, at least now I know it's possible.  

Many thanks, 

//Kevin