Borrowing on your Equity

Using your equity to by a new home

At mortgagesplease, we handle the arranging of all kinds of loans within the mortgage umbrella, from first time buyers through to buy to let purchases. We know and understand lenders and by understanding your needs, we can negotiate an appropriate deal for you, whatever the reason for needing the money.

If you have sufficient equity in your home, for example, you may be able to borrow more money for a second home, home improvements, debt consolidation, school fees, divorce settlement and many other purposes. It could also be a way to raise additional money for business purposes, gambling, paying a tax bill or investing in stocks and shares - this is not an exhaustive list and each lender has its own criteria.

The key thing is to be able to demonstrate to the lender that you can afford any additional borrowing.

As to whether your existing lender is the best bet or to approach a different lender, if you have redemption penalties on your current mortgage then it may well be better to ask for a further advance from your current lender. However, the rate you will be offered is likely to be higher than the rate you are on, so it may still be beneficial to consider another lender - even given the penalties for leaving early - especially if you are increasing your mortgage significantly. A better rate might be available elsewhere and there is nothing to lose by contacting mortgagesplease to find out.

If there are redemption penalties on your mortgage, then you can still ask your current lender for a better deal. We would still expect you to be able to get a better deal elsewhere because very few lenders offer their most competitive rates to existing borrowers.

You can only have one mortgage on your home, so you will not be able to have two lenders on the same property: one for the existing borrowing and one for the additional borrowing. Instead, there are companies that offer secured loans (not mortgages) on your property: they get a "second call" on your property if you cannot meet the payments and the property is eventually repossessed. As a result, their rates are likely to be more expensive than a mortgage, but are an option to consider if your income is not sufficient to secure the amount you need.