Remortgage affordability 15 October 2022 at 5:55AM in Mortgages & endowments 5 replies 580 views

CharlieChops

I am remortgaging, I would like increase my mortgage to consolidate debts and for some home improvements. Are the debts calculated in the affordability assessment or are they ignored as they will be paid off with the remortgage?

Catsacor

Consolidating your debt into a new mortgage deal means you'll be spreading that money, you owe, over 20+ years ...... all that money paid in interest ..... do you really want to do that ?
For home improvements i understand but to just kick the debt, you owe, further down the road is throwing your hard earned money away 😬 

To answer the question asked, it will depend on all the figures involved in the equation.

K_S

@charliechops It depends on the lender and the associated debt con criteria (which differs across lenders). This will include things like post remo LTV, size of debt, number of debts, credit history, how large the debt is in proportion to income, etc.

Generally speaking, with mainstream lenders, over the recent past background debt has had more of an impact on lending decisions and affordability than it used to.

I would recommend getting in touch with a broker to get a realistic idea if your options. The MSE guide here can help you find one.
https://www.moneysavingexpert.com/mortgages/best-mortgages-cashback/#step3

CharlieChops said:

I am remortgaging, I would like increase my mortgage to consolidate debts and for some home improvements. Are the debts calculated in the affordability assessment or are they ignored as they will be paid off with the remortgage?

ACG

Most lenders will ignore the debt if it is being consolidated. But not all, there are at least 3 lenders I know of who wont ignore it, but at least 20 I know of who will. 

You either need to check it with the lender before applying or get your broker to check if you are using one. You could pick a lender at random and odds are you will be ok, but for the sake of a phone call its better to check. 

CharlieChops

I am remortgaging with my current lender Kent Reliance

volcanopete

CharlieChops said:

I am remortgaging with my current lender Kent Reliance

I am finishing off a remortgage on monday with my existing lender Britannia aka the co-op.I have gone for a 5year fix no fees at 4.62% to commence the 1st May when my old fixed rate comes to an end.The increase in interest rates from 1.9% to 4.62% works out it will take all of the 10.1% CPI figure in september 2022 increase in my state pension.We only have a piddly mortgage but many need to get ready for the hit.Britannia have been terrific and actually reward long-term loyalty.
There's a load of the smelly stuff coming down the tracks!