Additional borrowing with existing lender

soxford

We are considering borrowing the additional funds needed to extend our home rather than move. We have savings for some of it. We know we can afford the additional payments on a second product with our existing lender.

There is a good chance that if we wait until it is time to remortgage to a new deal (May 2024) then costs will go up yet again to have the work done, and who knows what rates will be doing! We were all set to move house at the end of our current deal but now the market is a mess - the type of house which would make the move worth doing is too expensive, payments likely to be as much if not more than what it would cost to renovate our existing home. What remains does not make the move worth doing, either because of location or just being in the same situation of needing to spend more money doing a load of work. So we are investigating what we can do to make it possible to stay put - we already have quotes and planning in place.

I've spoken to current lender Barclays about additional borrowing and having two mortgage products with different terms/periods. My understanding - and I'm hoping someone can confirm or tell me what I'm missing? - is that we would need to consider a product with no ERC to have the option of remortgaging both to a new deal/lender when our main mortgage deal comes to an end next year.

At the moment the only deals with no ERCs which Barclays offer existing customers are trackers, but my assumption is that we could come out of that next year and move the debt to move to a new deal or new lender if the rates are more favourable. 

Does this sound correct or is it not this simple? Any advice please? Thanks in advance.

housebuyer143

No, that's correct. You get a product with no ERC and you can move it when your are ready. I would do this if your plan is to remortgage in May and then combine them with the new lender, or with Barclays.

soxford

housebuyer143 said:

No, that's correct. You get a product with no ERC and you can move it when your are ready. I would do this if your plan is to remortgage in May and then combine them with the new lender, or with Barclays.

Thank you - we've mulled over this for so long, you start to doubt yourself don't you! Another rate hike does not help the decision making...