What is a further advance mortgage?
A further advance is additional borrowing taken from your existing mortgage lender. Rather than taking out a completely separate mortgage with a new lender, you apply to borrow more from the lender you are already with.
This extra borrowing is secured against your property and is usually arranged alongside your existing mortgage. Whether you are accepted will depend on things like your lender’s criteria, how much equity you have in your home, your income and outgoings, and whether the additional borrowing is affordable.
People sometimes use the phrase mortgage advance in different ways. In this context, a further advance usually means borrowing more on an existing mortgage.
If you are not sure whether a further advance or a remortgage is likely to be the better option, we can help you understand the pros and cons of each.
A MORTGAGE IS A LOAN SECURED 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.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.
Can I borrow more on my mortgage?
It may be possible to borrow more on your mortgage, but it will depend on your circumstances and your lender’s criteria.
When assessing whether to offer a further advance, lenders will usually look at things such as:
- How much equity you have in your property
- Whether the extra borrowing is affordable
- Your income and regular outgoings
- Your credit profile
- The purpose of the borrowing
- The maximum loan to value your lender is prepared to offer
Some lenders are more flexible than others, and some may place restrictions on what the money can be used for. That is why it can be helpful to get advice before you apply.
We can help you understand whether borrowing more from your current lender may be realistic, and whether there may be better alternatives available.
Further advance vs remortgage
A further advance and a remortgage can both be ways of borrowing extra money against your property, but they work differently.
A further advance usually means borrowing more from your current lender. This can sometimes be simpler if your existing lender is willing to help and their terms are competitive.
A remortgage usually means replacing your current mortgage, either with your existing lender or with a new one. This may sometimes offer more flexibility, or it may work out better financially, depending on your current deal and the wider options available.
The right choice will depend on things like:
- Your current interest rate
- Whether early repayment charges apply
- How much extra you want to borrow
- The purpose of the borrowing
- Your lender’s criteria
- What other mortgage options may be available to you
There is no one size fits all answer. In some cases, a further advance may be the more straightforward route. In others, a remortgage may be more suitable. We can help you compare both properly before you decide.
What can a further advance be used for?
There are a number of reasons why someone might consider a further advance. Common examples include:
- Home improvements or renovation work
- An extension or major repairs
- Energy efficiency improvements
- Raising funds for other significant expenses
- Helping family in some circumstances
- Debt consolidation in some cases, where appropriate
Not every lender will allow a further advance for every purpose, and the reason for the borrowing can affect the options available.
If you are thinking about borrowing more, it is important to make sure the borrowing is affordable both now and in the future. We can talk through what you are looking to do and help you understand what may be possible.
Can you get a further advance on a buy to let mortgage?
In some cases, yes. Some lenders may allow a further advance on a buy to let mortgage, but the criteria can be different from residential borrowing.
The lender may look at factors such as:
- The value of the property
- The amount of equity available
- The rental income
- The purpose of the borrowing
- Your wider landlord circumstances
Buy to let further advances can be more specialist, so it is worth getting advice before making assumptions about what a lender will or will not agree to.
If you have a buy to let property and are considering raising more money against it, we can help you understand the options and the likely lender considerations.
Why speak to Your Mortgage Expert about a further advance?
Borrowing more on your mortgage is not always as simple as it first sounds. The right route will depend on your current mortgage, your lender’s criteria and what you are trying to achieve.
At Your Mortgage Expert, we can help you:
- Understand how a further advance works
- Compare a further advance with remortgaging
- Make sense of lender criteria and affordability
- Understand what documents may be needed
- Explore suitable options with High Street and specialist lenders
- Move forward with clearer, more confident advice
We help clients across the UK by phone and video, as well as offering in person appointments where appropriate.