If you were fortunate enough to lock in your mortgage into a fixed-term mortgage within the last year or two, you will most likely have a historically low interest rate.
But what if, like many others, you now find yourself in a situation where you need additional funds? This may be for such things as home renovations, consolidation of unsecured debt or some other unexpected cost. With current interest rates substantially higher than the rate on your current mortgage, you don’t want to rewrite a new mortgage and give up that, now unheard of, rate but at the same time you need the additional money.
What to do?
Fortunately, in this case, you can have your proverbial cake and eat it too.
Your first option is the have your Grimsby Mortgage Broker do what is called an increase and blend. How this works is we would arrange to have your existing mortgage amount increased by the amount of additional funds that you require. The lender will take the original mortgage amount at the lower rate and blend it with the additionally required money at the new higher rate. You will still end up with a new first mortgage but with a blended interest rate averaged somewhere between your current rate and the new going rate.
As an added bonus you will avoid a pre-payment penalty on your current mortgage. Truly the best of both worlds. Your original maturity date will stay the same and at renewal time you can either simply renew or your Grimsby Mortgage Broker can shop the lender market for a better deal.
There are times when this might not be your best option so if you are unsure or need some advice, we are here to help! You can learn more about the difference between a second mortgage and refinancing your first here. As each individual situation is different and things are changing quickly, we highly recommend discussing your options with a trusted mortgage broker.