Using the summer to make home improvements? Take out additional borrowing without affecting your current mortgage

6th August 2018

 

Summer is the perfect time to make the home improvements that have been sat on your to-do list since goodness-knows-when! The sun is out, there’s a spring in your step and all of our moods are benefitting from the lack of grey sky.

The good news is that if you have enough equity in your property, you can release it to do these home improvements, without changing the terms of your mortgage. The loan you could take won’t just cover some pots of paint either – it could be as much as 90% of the value of the property (subject to different lenders offerings).

Let’s use the example that you want to release some equity from your property and you’re on a five year fixed deal with your mortgage lender with a caveat that, if you want to come out of the deal, you have to pay an early repayment charge. No problem! You could get a further advance on your mortgage without paying the early repayment charge.

 

5 Reasons why additional borrowing could be the solution:

 

  1. If you’re on a good interest rate with your current mortgage lender, the additional borrowing will not affect your current mortgage terms.
  2. The interest rates are typically lower on a secured loan than an unsecured loan, as the mortgage company has your house as collateral. This could be a difference of 2-5% – which will save you hundreds of pounds over the term of the loan.
  3. Additional borrowing can be spread out over a longer term, either to coincide with your current mortgage or a term of your choice – typically before your selected retirement age. This gives you the flexibility to choose the term that fits within your given budget.
  4. Properties tend to go up in value and, with the home improvements you’ve made adding to the overall value of your property, taking out additional borrowing from your mortgage lender means that you are releasing money that is yours, rather than loaning additional funds.
  5. There are no early repayment charges! Additional borrowing with your existing lender doesn’t mean you’ll incur the charge associated with exiting your fixed term agreement.

 

The even better news is that equity from your property can be released into your bank account within a relatively short time frame. More often than not, we see advances like this in a client’s bank account within one month.

So, don’t believe the myths that your current mortgage rate will be affected if you take out additional borrowing. Make the most of Summer and book yourself in for a conversation with one of our expert mortgage advisors, and see what options are available to you to finally make those home improvements.

 

All content is accurate at the time of publication

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