The Bank of England has cut the base rate to 4.25%. Here’s how it will impact interest rates and the mortgage market, and what it means for your move.
Additional borrowing
Additional borrowing is when you borrow more on your existing mortgage.
It's a common way of funding home improvements or raising a deposit to buy another property.
Explore additional borrowing options
Average mortgage rates: 75% LTV (January 2025)
1-year fix - 4.39%
2-year fix - 4.71%
3-year fix - 4.67%
5-year fix - 4.5%
10-year fix - 4.82%
Average mortgage rates: 60% LTV (January 2025)
1-year fix - 4.22%
2-year fix - 4.54%
3-year fix - 4.45%
5-year fix - 4.32%
10-year fix - 4.76%
How much could my mortgage repayments be?
Get a quick idea of how much it's going to cost each month or how a rate change could affect your monthly payments.
How can I borrow more on my mortgage?
Additional borrowing can be done in a few ways:
A further advance is when you borrow more money from your existing lender.
A second charge mortgage is when you use the equity in your home as collateral to take out a second mortgage. The loan can be taken out with your current lender, or a completely different one.
Remortgaging is when you look for a completely new mortgage deal because your current one is about to end.
Ways to borrow more on your mortgage
1: You can contact your existing lender if you're looking to secure extra borrowing through them. This can be a good route if your current mortgage deal isn't expiring soon.
2: If you're looking to remortgage completely, a mortgage broker will scour the market to find the best rates available for you.
3: You can also approach individual banks and building societies if you're looking to arrange a second charge mortgage or to remortgage completely.
Mortgages for additional borrowing
Allow award-winning Mojo to show you the best rates available to you. A whole-of-market broker, Mojo work with over 70 lenders. And they won't charge you a penny for their services.
How a broker can help with additional borrowing
Fill in a few details
Tell Mojo about yourself and your situation so that they can get to know you, provide you with advice and ensure you’re eligible. It will take around 8 minutes.
Speak with an expert
Book a call and speak to one of Mojo's in-house mortgage experts, who will compare thousands of deals from over 70 lenders to find one suited to you.
Additional borrowing sorted
Leave it with Mojo; the paperwork, the application, the bank poking and protection insurance, they'll handle all the stress. And if you’re remortgaging, they could save you a lot of money.
Am I eligible for additional borrowing?
Only an individual lender can tell you if you're eligible for additional borrowing on your mortgage, but there are certain things that can absolutely help you along the way.
A good credit rating
Having equity in your home
You're up to date with all of your mortgage repayments
You can prove you can afford the additional repayments
Guides on additional borrowing
The latest news on mortgages
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Additional borrowing mortgages: frequently asked questions
Got questions? We’ve listed the ones we hear all the time.
Is it a good idea to borrow more on your mortgage?
Whenever you're borrowing against your home, there are always potential risks if you can't keep up with your mortgage repayments.
Some people may prefer to use an unsecured loan, which doesn't use your home as a guarantee.
When running two mortgages together (as is the case with a further advance or a second charge mortgage), they run concurrently but may have different end dates.
This means you'll need to wait for both to finish before you can remortgage to avoid costly exit fees.
That said, additional borrowing remains a popular way of funding major home improvements, or freeing up cash to put towards a second property.
Should I remortgage for home renovations?
Additional borrowing or remortgaging is a popular way to fund home renovations.
And because you're adding value to your property, renovating is viewed favourably as a reason to remortgage by lenders.
As long as you can prove you can afford the repayments, then additional borrowing could be the answer.
Mortgages often come with lower interest rates than loans or credit cards. But it's important to remember that you could pay more interest in the long term.
The loan will also be secured against your property, which means you must ensure you can keep up the repayments, otherwise it could be at risk.
Will mortgage rates go down this year?
Buyers holding out for lower mortgage rates in 2024 may be disappointed, as they are unlikely to decline much further this year, even if inflation and the Base Rate edge lower.
Our Executive Director of Research, Richard Donnell, says: ‘Expectations of lower interest rates are already priced into fixed rate mortgages today.
‘Lower interest rates would likely result in further modest declines in mortgage rates but how far depends on how low money markets see base rates falling.
‘Economists currently expect base rates to fall to 3.5% by the end of 2025, which would imply mortgage rates remaining in and around the 4%+ range.’
How to get mortgage-ready
Organise your finances and pay down your debts so that your credit score is in good shape.
Work out how much you can afford to borrow and comfortably repay each month.
Explore the market to see the best rates by speaking to a whole of market broker or individual lenders.
What does 'loan-to-value' mean?
Loan-to-value is the amount you’re borrowing for a mortgage, expressed as a percentage of the home's value.
If you have a £20,000 deposit for a £200,000 property, your loan-to-value is 90%.
The larger your deposit, the lower your loan-to-value. A loan-to-value of 60% or less will open up the best mortgage rates from lenders.
How can I be sure I've got the best deal?
The best way to know you've got the best deal for you is to:
Understand how much equity you have in your home
Know your loan-to-value mortgage ratio
Ensure your credit score is in a good place
Research the best mortgage rates from a range of lenders or ask a mortgage broker to find the best rates and deals for you.
The best way to compare mortgage rates
When looking for a new mortgage, you can scour the market and approach individual banks and building societies to find out the best mortgage rates available to you.
Or you can ask a mortgage broker to do the hard work for you.
Whole of market brokers often have access to deals that aren't readily available on the high street and they can save you a lot of time and effort.