Most new mortgages come with an initial commitment to the lender to stay with them for a period of time. For example, if you have taken a 2 year fixed rate, you would be expected to remain with that lender for at least 2 years or you would incur an Early Repayment Charge for repaying the mortgage sooner. At the end of the initial commitment period, however, you are in a position to ‘shop around’ again for the next mortgage.
The first thing to do is to consider any offerings your existing lender has. An MR Mortgages Adviser can help you with this, even with your existing lender. Your existing lender may have some rates you can switch to and the advantage of this is speed. However, the rates which they offer may not represent the most cost-effective solution for you if another lender in the market is offering a cheaper overall product. Our advisers can help you to compare all the options available.
Further borrowing
If you have equity in your home and you want to borrow against that equity perhaps to complete home improvements, buy a second home or purchase a car etc, then there are a number of options available.
Further Advance:
You can approach your existing lender for a further advance. This essentially is an increase to your existing mortgage. The lender may breakdown the loans separately meaning that you might have different interest rates or terms on each part of the mortgage. Contact a MR Mortgages Adviser who can help guide you on the best way to structure your further advance, even if you are staying with your existing lender.
Remortgage and capital raise:
You will need to qualify for the additional borrowing, even with your existing lender. If you do not qualify for your existing lender a remortgage to a new lender could be a possibility and increase your mortgage at the same time. Even if you qualify for a further advance with your existing lender, a new lender may be more cost-effective and save you a significant sum of money.
Second Charge:
If you are in an initial period where you will incur an early repayment charge for remortgaging and/or you are unable to obtain a further advance, another option is to take a second charge. This is a loan with a second lender, which is secured on your home but the existing mortgage remains in place.
If you are looking for a better rate, further borrowing or both, we can help