PCP & Remortgaging

SuperE20199

Hi all,

Our remortgage is due on the 1st July, and we’re looking at going through a new lender via a broker. However, we also need to change our car on pcp and I’m wondering if getting this done now will cause issues with our remortgage?

we haven’t applied for anything (remortgage wise) just yet, but expect to start the process towards the middle/end of May.

thoughts and help/advice appreciated!

Veteransaver

If you already have a car on PCP and the next one isn't significantly more expensive then it may not have any impact.

SuperE20199

Anyone else have any thoughts on this?

Thinkandgrow1

As said before if the pcp amount isnt much different then affordability/borrowing power will be the same. I wouldn’t take out a car that is a higher monthly payment however before you’ve re mortgaged. 

Phoenix72

Maybe it will affect it, maybe it won't.

Personally, I wouldn't risk it when miving to a new lender.

amnblog

An active PCP affects your affordability. If the payments next or no more than the payments now, you are no worse off for affordability. If they are higher, your affordability reduces.

Why not simply ask your Broker beforehand.

kingstreet

We've found with Halifax and NatWest PCP balloon payments which are large compared to income can cause a decline. We've never got to the bottom of what constitutes large but if your income is £40k and your balloon payment over maybe £30k it may be a problem.

picky123

kingstreet said:

We've found with Halifax and NatWest PCP balloon payments which are large compared to income can cause a decline. We've never got to the bottom of what constitutes large but if your income is £40k and your balloon payment over maybe £30k it may be a problem.

Which is crazy when you can just hand the car back and not pay the balloon.

kingstreet

picky123 said:

kingstreet said:

We've found with Halifax and NatWest PCP balloon payments which are large compared to income can cause a decline. We've never got to the bottom of what constitutes large but if your income is £40k and your balloon payment over maybe £30k it may be a problem.

Which is crazy when you can just hand the car back and not pay the balloon.

I don't think lenders have figured out how to differentiate between a PCP balloon payment and the balance on loan, card etc as the balloon payment is included in the balance on the credit report rather than a separate figure. It therefore distorts debt to income ratios.