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I have a particularly good mortgage deal (lifetime tracker, base rate + 0.18% with a 2% collar).

If I were to approach my mortgage lender and ask to extend the mortgage, to borrow more against the equity I have in the house - would I be able to keep the same interest rate and term (obviously my repayments would increase), or would they count it as new business and make it subject to current interest rates and a new 25-year term?

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@DilipSarwate - It is good to know what to expect, or what to ask before approaching the lender, who is essentially a salesperson. What luck for Vicky if her lender is open and fair, but just in case she should prepare ahead of time. –  MrChrister Nov 9 '12 at 0:01
    
@MrChrister, I can't see the comment you are responding to, which presumably said "why not ask them and find out", but yes, being prepared before I approach them is part of it. The other aspect is that to ask them this I have to make an appointment to see a mortgage adviser face to face, which is inconvenient with a small child and usually involves a lot of hard sell that I'd prefer to avoid. –  Vicky Nov 9 '12 at 16:36
    
You got it. That was the issue behind our comments. –  MrChrister Nov 9 '12 at 22:40

1 Answer 1

Run the numbers in advance.

  • Understand what are the current rates for an additional 2nd mortgage, what are the rates for a brand new mortgage that will cover the additional funds. Understand what they are for another lender.

  • Estimate the amount of paperwork involved in each option (new first, new 2nd, and new lender).

  • Ask the what are the options they can offer you. Because you have estimated the costs in money and time for the different options, you can evaluate the offer they make.

What they offer you can range from everything you want to nothing you would accept. What they offer will depend on several factors: Do they care to keep you as a customer?; Do they expect you to walk away?; are they trying to get rid of mortgages like the one you have?; Can they make more money with the plan they are offering you?

You will be interested in the upfront costs, the monthly costs, and the amount of time required for the process to be completed.

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