Raise Capital Without Changing Your Mortgage | Raising capital while keeping your current mortgage deal can be a smart move, especially if you’re locked into a competitive rate. This option allows homeowners to access funds without remortgaging the entire loan, helping avoid early repayment charges and preserving low-interest terms.
Whether you need funds for home improvements, business investments, or large one-off expenses, there are flexible ways to release equity without disrupting your main mortgage.
When it comes to accessing funds for various purposes, homeowners often have a valuable asset at their disposal: home equity. Home equity is the difference between your property’s market value and the outstanding mortgage balance. It can be a useful financial tool, enabling you to raise capital without selling your home or altering your current mortgage arrangement.
Given the rise in mortgage rates, many borrowers prefer to keep their lower fixed rates. They aim to avoid remortgaging to more expensive deals. This guide provides insights into raising capital while retaining your existing mortgage, ensuring compliance with UK lending criteria.
What Is a Further Advance?
A further advance is when your current lender allows you to borrow additional funds secured against your home. The new borrowing is separate from your existing mortgage and may have a different rate or term. This option keeps your primary mortgage intact while providing access to capital.
You can usually use additional funds for purposes such as renovations, debt consolidation, or helping family members with deposits. Repayment terms are flexible, and the rates are often lower than those of unsecured personal loans.
Second Charge Mortgage: Another Option
If your current lender does not offer a further advance, a second-charge mortgage may be suitable. This is a new loan secured against your property and runs alongside your existing mortgage.
Second charge mortgages can work well when you don’t want to lose your original deal or if you have early repayment penalties. They also offer flexibility in loan size and term.
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Why Not Just Remortgage?
Remortgaging can still be a good solution if your current deal is coming to an end or you want to consolidate your borrowing. However, in many cases, homeowners benefit from retaining a low fixed rate on their main mortgage while topping up through a further advance or second charge.
Before making any decisions, consider your total borrowing cost, fees, and flexibility.
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How We Help
At Connect Mortgages, we work with lenders across the market to match your goals with the right solution. Whether you’re a first-time borrower or a landlord with a portfolio, our team helps you navigate capital raising without disrupting your existing mortgage unnecessarily.
If you’re a mortgage professional looking to help clients with more flexible borrowing options, consider joining our Mortgage Network. Our network supports brokers across the UK with tools, training, and access to a wide panel of lenders.
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