Making sense of this.....

trampyblonde

Hi,

Im looking into borrowing an extra 10k on my current mortgage. Im currently on a 2 year fixed rate which ends in November this year.

Anyway, ive looked on the Natwest website and im really confused.

If I borrow now I dont want to be tied into Natwest for longer than this mortgage. The options on the website are:

"Choose a discounted variable-rate or a fixed-rate mortgage for your additional borrowing."

Heres a link if anyone wants to look.

Your help is greatly appreciated! Thanks!

Dick_here

Unless you can repay the extra 10k before November you are bound to be tied to them beyond then !

trampyblonde

Ah I see, I had a feeling thats how it worked. Thanks!

minimike2

You could borrow the £10k on the standard variable rate and then review the whole mortgage once the existing deal ends.

trampyblonde

Thanks. So are you saying that if I get it on that deal then I can still review the mortgage in November and move elsewhere if I wanted?

Sorry if im confused, this is all quite new to me.

minimike2

Yes. The standard variable rate shouldnt have any arranagement fee or tie ins. You may pay an admin fee for the applicaition, in the region of £125 and the rate will be higher than any of thier "deals", but it will allow you to review the whole mortgage and move to another lender once the deal on the main mortgage ends.

trampyblonde

great thanks for explaining!! Now, do you think thats the best way rather than taking out a separate loan elsewhere and paying this off in full In November?

minimike2

if you need to borrow it on the mortgage for budget reasons then yes, its not that long a period of time and with the amount the difference in payments between a discount and the SVR wont be massive, but it means when the deal on the main mortgage is up you can search the market for the best deal for the whole of the borrowing without having any early repayment charges.

If you can afford the additional payment of a shorter period personal loan in addition to the mortgage then that is better, as it will cost less in the long run (assuming its taken over a shorter term than what you intend on doing so if its as a further advance on the mortgage) and it is unsecured rather than being secured on the property.