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 consolidationConsolidating multiple debts into one loan, often using the ..., 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.

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 getting more money from your lender—like Barclays, Halifax, or Nationwide—on top of your existing loan. It works like an extra loan or secured loan based on your current mortgage balance and the lender’s lending criteria. People often use this additional money for purposes such as paying off unsecured debts, credit card balancesOutstanding credit card balances, which may affect a borrowe..., personal loans, or funding home improvements like energy-efficient improvements or structural changes. Some also borrow for personal reasons, university fees, business purposes, or to reduce their overall credit commitmentsAny existing financial commitments, such as credit card or l.... The process can be started through online banking or a mortgage appointment with a mortgage adviser or broker support team. Many lenders offer tools like a loan calculator, affordability calculatorWhat is an Affordability Calculator? An affordability calcul..., or rates tool to give you an indication of costs.

Do I have to pay a fee for additional borrowing?

Yes, you might have to pay a product fee, arrangement fee, or other costs listed in the lender’s tariff of mortgage charges. It’s advisable to check your mortgage statement or speak with mortgage arrangers or a qualified mortgage adviser who can assess your financial situation and explain the fees. Some lenders offer fee-free and fee-paying products, so you may have options depending on your current circumstances and the type of product selected.

How much extra money can I borrow?

The amount depends on several factors, such as your age, income credit, personal income, property price, current mortgage payments, repayment type, and whether you’re applying for a residential mortgage or borrowing for debt consolidation. Your credit rating, credit file, lending policy, and overall financial commitments also play a role. Mortgage holders should consider the minimum borrowing term, maximum loan available, and the maximum termThe maximum term for a mortgage. allowed by the lender. Online calculator tools can help you check your additional borrowing limit based on current deals and your affordability.

Why should I borrow more on my mortgage?

Borrowing more can help consolidate personal debts or fund property improvements such as energy-related improvements or reducing your carbon footprint with green upgrades. Others use additional borrowing to manage financial pressure, childcare or school feesExpenses for private school education that may affect a borr..., or speculative purchases. Mortgage customers might find it more convenient than taking out an unsecured loan, especially when lending into retirementA mortgage where repayments are made beyond the borrower's r... criteria or lending requirements are met. However, it’s important to ensure the extra borrowing fits your repayment strategy and doesn’t affect your long-term financial decision-making.

Do I need a solicitor for additional borrowing?

In most cases, you don’t need a solicitor, but speaking with a specialist mortgage adviser or broker support is recommended. They can assist with your application pack, ensure all applicant names are correct (including middle names), and help review your title deedsLegal documents that prove ownership of a property., especially if the property has a freehold title or extended lease. They can also guide you through the full process and highlight any extra insurance requirements or security address changes needed.

Can I borrow more from NatWest?

Yes, NatWest and other lenders such as Royal Bank of Scotland allow additional borrowing applications. A broker or mortgage adviser can assist in reviewing your current mortgage deals, property ownership type, and whether borrowing for business purposes, debt consolidation, or personal consumption makes sense for your individual situation.

Are further advances good for paying off debts?

They can be, particularly if you’re consolidating higher-interest unsecured payments like credit cards or personal loans. But you must consider your income, credit search results, and whether a further advance is a suitable option compared to other unsecured lending options. Review your current debts and financial commitments to avoid affordability issues later.

Can I borrow more on a fixed-term mortgage?

Yes, it’s possible to borrow more during a fixed-rate period. You may explore extra borrowing options or switch products depending on your lender’s lending criteria. It’s also worth checking whether your mortgage has flexibility for a temporary interest-only arrangement or shorter term to adjust for changes in your financial situation or base rateThe interest rate set by the Bank of England, affects the in... fluctuations.

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

Missing a payment can lead to further issues. Lenders usually offer a grace period and may propose alternatives like a temporary repayment plan or a move to a variable rate. It’s important to act quickly—use your banking app, contact your lender by phone company line, or refer to FAQs expandable on their site.

How does additional borrowing work?

You can apply for additional lending in several ways: by increasing the loan amount on your current mortgage, adding a subsequent charge, or switching to a different repayment type like interest-only or part-and-part. Depending on the lender, this may affect your mortgage interest rates, mortgage term, and total cost. For illustrative purposes, you can use tools like Barclays Mortgage Boost or the Additional Loans Calculator to estimate how much you can borrow. Make sure to register for online banking and have your log on details ready when submitting your online application. Consider how your current rates, current mortgage balance, and property sales history might impact the process.

Before applying, always seek mortgage advice to ensure the product is aligned with your current needs. If you’re a residential mortgage holder or have a buy-to-let mortgage, check the eligibility for additional borrowing offers and whether your borrowing options might be influenced by credit checks, personal bank statementsA record of a borrower's financial transactions often requir..., or property type. Remember, this process is not suitable for all and depends heavily on key criteria and your personal and financial profile.