Many homeowners consider a further advance on their mortgage to finance home improvements, fund major expenses, or raise a deposit for a further property purchase.
Affordability and repayment
Affordability is assessed on your income, expenditure and overall credit profile. The lender will also consider the combined impact of your existing mortgage and the additional borrowing.
Repayments are usually on a capital and interest basis, although interest-only options are available in certain cases.
Loan terms and lending criteria
You will need sufficient equity in your property and a clear purpose for the additional funds. A strong repayment history on your current mortgage will also help.
Lenders will also reassess your property’s current value. The amount you can borrow will depend on your loan-to-value (LTV), income, and existing commitments. Most lenders have a minimum and maximum borrowing amount for further advances.
Further advances are typically structured as a separate account alongside your current mortgage and may come with a different interest rate and term.
Pricing and fees
The further advance will be priced at the lender’s current interest rate, which could differ to your existing mortgage rate.
You may also consider a Home Remortgage . Our advisers can compare all available options before you commit.
As a mortgage is secured against your home, it could be repossessed if you do not keep up the mortgage repayments.
