A guide to borrowing more money

What do we mean by borrowing more? 

Borrowing more is when you ask your lender for more money. When borrowing more from Principality you can either remortgage or increase the amount you owe on your current mortgage.  
 

You may want to borrow more money for things like: 

• home improvements 
• urgent home repairs 
• debt consolidation  
• paying for a life event or goal 

Things to know  

The amount you want to borrow plus the amount owed on your current mortgage cannot be more than a set loan to value (LTV) threshold.

• Thresholds are 90% LTV for residential properties or 75% LTV for buy to let or holiday let properties. 
• The additional amount you borrow would be owed against your home. 
• The minimum term is 2 years and maximum term is 40 years.
• You have to wait 3 months after taking out a mortgage with us to apply to borrow more.  
• You must be up to date with your mortgage repayments.  
• You must show a history of being reliable with repayments.  
• You must meet our lending requirements. 
• You will be charged a fee. 

Loan-to-value is the percentage you borrow as a loan in relation to the total value of your property. 

Things to consider  

You should always consider seeking financial advice before making any big decision about your mortgage.  

The other things you may want to consider before borrowing more are: 

• Would the additional monthly repayments be affordable? 
• How much equity (money) is currently in your home? Is the amount you want to borrow more or less than this amount? 
• If interest rates increase once your fixed term is over, could you manage an additional increase in your repayments? 

An example of borrowing more 

Example 1:

Let’s say you took out a mortgage for £300,000 fixed term at 5.6% for 25 years.  Over the years your equity has grown to £70,000. This means you now owe £230,000. 
 

You want to make home improvements and need £100,000. You have had your property valued and you know it is worth £420,000.  
 

This means if you borrowed £100,000 more, you would owe the lender £330,000.  
 

As your property is worth £420,000 you would not be in negative equity by borrowing more. 
 

If you borrowed more for 23 years at the same interest rate, your monthly payments would increase from £1427 to £2130. 
 

This is an increase of £703 a month. 
 

*It is also important to remember that your mortgage payments may go up or down when you remortgage in future, so you should consider if you could afford to borrow more in the long and short term.* 

 

Example 2:

Let’s say you took out a £300,000 mortgage ten years ago.   
 

Through making your monthly repayments over the years, you’ve reduced the amount you owe to £236,000. And you’ve recently had your property re-valued; it's now worth £420,000.   
 

Now let’s imagine you want to make some significant home improvements. You’d like to borrow an additional £100,000 to do some renovations.  
 

If you borrowed £100,000 more, you would owe the lender £336,000 against a property worth £420,000. You’d have an LTV of 80% and 20% equity 
 

*It is also important to remember that your mortgage payments may go up or down when you remortgage in future, so you should consider if you could afford to borrow more in the long and short term.* 

It is also important to remember that your mortgage payments may go up or down due to future changes to interest rates, so you should consider if you could afford to borrow more in the long term as well as in the short term.  
 

If you struggle to meet your repayments, you run the risk of your home being repossessed by the lender. 

Equity: Simply deduct your remaining mortgage balance from the value of your property. The amount that’s left is your equity. 
 

Negative equity: If you owe more on your mortgage than your home is worth you are in negative equity 

How much more could I borrow? 

The additional amount you could borrow depends on your personal circumstances.  
 

You may want to chat to a mortgage advisor to calculate how much more you could afford to borrow. 
 

We always recommend seeking independent financial advice before making a financial decision.