A Comprehensive Guide to Additional Mortgage Borrowing

Getting additional borrowingWhat is Additional Borrowing? A Quick Overview When you take... on a mortgage in the UK is complicated but possible. There are many things that you need to consider while starting your application. Sometimes, as a borrower, we require extra funds to finance any needs like home improvements, debt consolidation, lifestyle changes, or business ventures.

You must take into account the current interest rates and fees associated with the mortgage, as well as the amount of additional borrowing you require. You must also consider if sufficient equityThe difference between the value of the property and the amo... is available in your property. It is important to check what type of additional borrowing your lender will allow and whether any additional conditions or restrictions apply. There are many other factors that you need to consider for this process. So, in this article, we will try to explore the topic in further detail.

Post Topics

What is additional borrowing on a mortgage?

How much can I borrow?

Things to consider before applying for additional borrowing on a mortgage

Which are the mortgage lenders that can provide additional borrowing on a mortgage?

Next steps

FAQs- Additional Borrowing on Mortgage

What is additional borrowing on a mortgage?

Essentially, additional borrowing on a mortgage is borrowing more money from your mortgage lender. The further advanceAdditional borrowing secured against a property that already... could be at a different rate compared to your original mortgage loan, but it is still usually a better rate than personal loans and credit cards. Borrowing more from your current lender can save you the hassle of remortgaging or switching lenders.

Personal loans, credit cards and overdrafts are forms of unsecured borrowing as they are not secured against your property, whereas additional borrowing on a mortgage is secured against your property, so it is important to understand the costs of borrowing and consequences if repayments are not kept up.

How much can I borrow?

Most lenders might stipulate a minimum amount that you can borrow to qualify for additional borrowing on a mortgage. Commonly, this could be around £10,000, although requirements can vary from lender to lender. If you need to borrow less than the minimum the lender is willing to loan, it might be better to consider other borrowing options.

Generally, you may be able to borrow up to 80% – 85% of your home’s value or 75% for interest-only mortgages, but again, this will depend on the individual lender, and each lender may have different loan-to-value requirements.

Things to consider before applying for additional borrowing on a mortgage

Just like your existing mortgage loan, the additional borrowing would be tied to your property, and if you default on payments, you could be at risk of repossession of your property. Although the lender will assess this, it is important for you to consider before applying if you can afford the added additional monthly payments on top of your original monthly mortgage repayments and other living expenses. Lenders will look closely at your income and outgoings, and a stress test will be carried out by the lender to ensure that in the case of interest rate increases, you will still be able to afford the monthly loan repayments.

It is important to have built-up equity in your property in order for you to be able to get a further advance. Many lenders will require you to have had your mortgage loan for a period of time before being able to apply for additional borrowing. They will also look at your track record and check you haven’t been behind on any payments.

As always, before applying for a loan or even generally as a good habit, it is wise to check your credit score to make sure there are no errors as lenders will use credit history to assess a borrower’s reliability and having a good credit score will strengthen your application.

Which are the mortgage lenders that can provide additional borrowing on a mortgage?

Mortgage Lenders Offering Additional Borrowing in the UK

1. Nationwide Building Society: Nationwide offers generous borrowing limits of up to 90% of the property value and a maximum borrowingThe maximum amount a borrower can borrow. amount of £500,000. They also offer no early repayment charges, making it flexible to adjust your borrowing needs over time.
2. Barclays: Barclays offers further advances up to 85% of the property value, with a maximum borrowing amount of £200,000. They also waive early repayment charges for fixed-rate mortgages, making it a cost-effective option for long-term borrowing needs.
3. NatWest: NatWest provides additional borrowing up to £500,000, with no early repayment charges. They also offer a consolidation option, allowing you to borrow up to 80% of the property value to consolidate high-interest debt.  
4. Halifax: Halifax offers additional borrowing up to 80% of the property value, with a maximum borrowing amount of £300,000. They also waive early repayment charges, making it a convenient option for flexible borrowing.
5. Santander: Santander’s further advances reach up to 85% of the property value, with a maximum borrowing amount of £199,999. They also provide a 0% initial interest rate for Green Additional Borrowing, making it attractive for energy-efficient home improvements.
6. HSBC UK: HSBC offers additional borrowing up to 85% of the property value, with a maximum borrowing amount of £199,999. They also have a mortgage switching service that can help you consolidate your loans and reduce your interest payments.
7. Leeds Building Society: Leeds Building Society offers additional borrowing up to 85% of the property value, with a maximum borrowing amount of £250,000. They also offer a range of fixed-rate mortgages, providing stability in your repayments over time.
8. The Co-operative Bank: The Co-operative Bank provides further advances up to 85% of the property value, with a maximum borrowing amount of £199,999. They also prioritize ethical lending practices and offer a variety of mortgage options to suit different needs.
9. Yorkshire Building Society: Yorkshire Building Society offers additional borrowing up to 85% of the property value, with a maximum borrowing amount of £250,000. They also have a range of mortgage options, including offset mortgages that allow you to offset your savings against your mortgage balance.
10. Aviva Building Society: Aviva Building Society provides further advances up to 80% of the property value, with a maximum borrowing amount of £250,000. They also offer a range of fixed-rate mortgages with competitive interest rates. Visit their website for more information:

Please note that eligibility criteria and borrowing limits may vary depending on individual circumstances and lender policies. It’s always advisable to consult with a mortgage broker to assess your options and find the best lender for your needs.

Next steps

If you are looking to borrow more through your mortgage, get in touch today, and a mortgage advisor can let you know if you are eligible to apply and what products are available to you. We can find out for you how much you can borrow and recommend a deal most suitable for you.

FAQs- Additional Borrowing on Mortgage

What is additional borrowing on a mortgage?

Additional borrowing on a mortgage means you get more money from your mortgage provider, like Halifax, Barclays, or Santander. It’s like an extra loan on top of your current mortgage. You might use this money to pay off things like credit card debts or personal loans.

Do I have to pay a fee for additional borrowing?

Yes, there might be an extra fee for additional borrowing. It’s best to talk to a mortgage adviser who can tell you about any costs and if it’s worth paying these fees.

How much extra money can I borrow?

The amount you can borrow depends on many things, like your age, financial situation, and if you have debts like credit cards or personal loan balances. It also depends on how long you’ve lived in your home, your current mortgage terms, and which lender you choose.

Why should I borrow more on my mortgage?

Borrowing more can help you pay off all your debts, like credit cards or car loans. But only do this if you’re sure you can make the monthly mortgage payments. If you can’t keep up, it could lead to problems later.

Do I need a solicitor for additional borrowing?

No, you don’t need a solicitor. But it’s a good idea to talk to a mortgage broker. They know a lot about borrowing more money on your mortgage and can guide you through the process.

Can I borrow more from NatWest?

Yes, if you have a mortgage with NatWest, you can ask to borrow more. A broker can help you find the best mortgage deal for your situation, including the right mortgage rate and terms.

Are further advances good for paying off debts?

It depends on your situation. If you’ve already borrowed a lot, paying off your current mortgage might be better before borrowing more.

Can I borrow more on a fixed-term mortgage?

Yes, you can ask to extend your fixed-rate mortgage. This can be good if interest rates go down, and it means you won’t have to worry about rising mortgage rates affecting your monthly payments.

What if I can’t pay my monthly mortgage payment?

If you miss a payment, your lender will usually try to help you first. They give you a grace period where you won’t lose your home, but you still owe the full mortgage amount.

How does additional borrowing work?

You can add extra money to your mortgage in three ways: extra principal (the total amount you borrow), additional monthly repayments, or interest-only payments. The main difference is that with the extra principal, you own more of the property, while the other methods change your share in the property. Interest-only payments don’t change the total cost of the loan.