Our Guide To Additional Borrowing On Your Mortgage

You might consider additional borrowing on your mortgage if, for example, you want to make home improvements. Here is our guide covering additional borrowing on your mortgage and how it works.

What is meant by additional borrowing?

When you remortgage you can organise additional borrowing, which means you borrow more money and therefore increase the overall size of your mortgage. The extra funds you arrange can then be used for home improvements, purchasing a car or school fees.

Three options for borrowing more on your mortgage:


Remortgaging is when you switch your mortgage debt to a new mortgage deal with either your existing lender or a new lender. When you organise a remortgage, you can also borrow more money at the same time by increasing your mortgage loan. When you remortgage, the lender may ask you additional questions such as why you are borrowing the money and what it will be used for. If you want to borrow more than £15,000 you may face more questions from the lenders. At the end of the day, it will come down to the lender’s affordability assessment.

Further advance

A further advance is when you borrow more money from your existing mortgage lender. Taking out a further advance is often used for home improvements or a deposit towards a second property purchase. When organising a further advance, as mortgage brokers, we will discuss your budget and assess your income and outgoings to make sure you can keep up with repayments. The extra money you borrow will be linked with your property so you could lose this if you weren’t able to keep up with your mortgage repayments.

Second charge mortgage

A type of secured loan, a second charge mortgage uses your property as collateral to borrow more money. You can use the equity you have in your home as security against taking out another loan. Ultimately, this means you will need some equity in your property to apply for additional borrowing. To work out how much capital you have in your home, you should deduct the amount you owe on your first mortgage from the value of the property.

In order to take a second charge mortgage you will need to get permission from your existing mortgage lender and prove to the second mortgage lender that you can afford to pay the repayments on both loans.

Should you arrange additional borrowing on your mortgage?

Whether you should arrange additional borrowing on your mortgage, really depends on your personal financial circumstances. There are more risks that come with additional borrowing including the risk of losing your home if you can’t keep up repayments. If this is something you are not willing to do then investigating an unsecured loan may be a better option.

Choosing a further advance on your mortgage could affect your ability to remortgage in the future and you may have to pay a fee to leave your old mortgage contract. Over the longer term, it can become more expensive by securing short term debt into a longer-term debt.

Selecting an Unsecured Loan may be the most suitable and cheaper option if you can repay the loan in a shorter period of time. 

What can the additional money be used for?

When remortgaging, you may be asked what the additional money is going to be used for? You could be asked to choose from the following:

  • Home improvements
  • School fees
  • Divorce settlement
  • Debt consolidation
  • Car purchase
  • Other property purchase

How eligible you are for additional borrowing will depend on the lenders affordability assessment, what the money is being used for, your credit rating, and the loan to value of your mortgage.

For further advice or to discuss additional borrowing on your mortgage with us, please get in touch.

*Please note: Think carefully about securing debt against your home.  Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.sessed if you do not keep up repayments on your mortgage or any other debt secured on it.

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