Additional Borrowing - Natwest

stu2500

Hello all, my partner and I are applying for some additional borrowing against our mortgage for home improvements with Natwest. We've been customers since 2017, currently in a 5 year fixed until January 2025.

Outstanding mortgage balance £93k
Property Value is circa £130k
Extra borrowing £12k for home improvements
LTV will be 81%

Joint income total = £83k (been in jobs for 20 years and 6 years, secure positions)
Loan 1 = £150
Car PCP = £270 (finished in December)
Credit cards circa £15k (interest free and chipping away at them)
1 dependent (no nursery fees as these have just finished as he has just turned 3)

BTL property on long-term lease 
Contractual payment is £270 per month as it is interest only but we overpay up to £450, rental income is £425

Can anyone foresee any problems with this? We have passed affordability but only had oru initial chat with them. Credit files are fine, no missed payments and on electoral role etc.

Thanks for any tips/suggestions. 

dimbo61

Why are you overpaying the BTL ?
Without doing a full fact find to look at all your circumstances ! 
Jobs, careers, savings, pensions, equity in both properties, ages, long term plans, BTL mortgage rate and term, residential mortgage rate and term.
Why 81% LTV
If you don't overpay for a couple of months you might drop into 80%LTV and get the extra borrowing.
Sometimes you need to sit down with a mortgage broker , accountant, FA to find the best way forward

stu2500

dimbo61 said:

Why are you overpaying the BTL ?
Without doing a full fact find to look at all your circumstances ! 
Jobs, careers, savings, pensions, equity in both properties, ages, long term plans, BTL mortgage rate and term, residential mortgage rate and term.
Why 81% LTV
If you don't overpay for a couple of months you might drop into 80%LTV and get the extra borrowing.
Sometimes you need to sit down with a mortgage broker , accountant, FA to find the best way forward

Both 40, we're at 60% LTV according to the Natwest HP Index on our residential mortgage. The BTL is roughly 80% LTV with £47k left to pay off.

Why do we overpay the BTL? It is on interest only and would like to clear the balance on this ASAP in order for us to use the rental income to then overpay our residential mortgage. The rate is higher on the BTL.We have a long-term tenant in there at present.

It's 81% LTV based on a rough value of £130k from me, this is what £12,000 additional borrowing takes us up to. If they go by the HP index, it'll be less but we wanted to be reserved.

I have been in my career for 12 years, 6 with my current employer, my partner has been with her company for over 20 years. Savings of £22k. I contribute 15% to my pension (including my employers 3%) and my partner aprox 8%.

We used a broker when we first applied for the mortgage but I didn't think it would be necessary for some additional borrowing of £12k. I was purely posting to see if anyone else had had a similar request or scenario. Thanks for your reply. 

housebuyer143

You can claim tax relief on the interest for the BTL. You pay it off and that saving is gone? 

stu2500

housebuyer143 said:

You can claim tax relief on the interest for the BTL. You pay it off and that saving is gone? 

I'm not concerned about that, we have both agreed that we'd prefer to pay it off then what's left of the rental income, we will use towards our residential mortgage. The BTL is on SVR at the moment, we have aproximately 8 years left on the mortgage.