NatWest is introducing a completely new standalone Additional Borrowing (ADBO) mortgage product, allowing homeowners across the UK to borrow more money against their home than ever before. This is a significant step forward for borrowers who need access to cash at times that don’t necessarily suit NatWest’s traditional product transfer window. With life milestones in terms of finance seldom being clean time periods, this new stand-alone procedure is a relief.
What is Additional Borrowing on a Mortgage?
Additional borrowing on a mortgage allows you to add-on your existing home loan with your current lender, usually to release funds for expensive items. Although remortgaging to a new lender would pay off your first mortgage with a new one, additional borrowing keeps your first mortgage and adds a second sub-account for the extra money.
People use additional borrowing for:
- Home improvements like house extensions, remodelling, or new kitchens and bathrooms.
- Debt consolidation, through the consolidation of higher-interest borrowing (credit cards or loans) into lower-interest mortgage facilities.
- Life events like weddings, school fees, or helping children onto the housing ladder.
With NatWest’s new standalone process, borrowers are not bound to wait until the 4-month product transfer period to apply. Instead, they can draw down funds at any point in their mortgage term, subject to qualifying for suitability.
Key Features of NatWest’s Standalone Further Borrowing Product
- Flexibility: Apply at any time, not only during the product transfer window.
- Eligibility: Customers must reside in the UK, have made one mortgage payment, and be current on repayment.
- Loan Amounts: Borrow £10,000 to £500,000.
- Loan-to-Value (LTV): 90% LTV, or 80% LTV if funds are to be used for debt consolidation.
- Repayment Basis: Any further borrowing must be on a Capital & Interest Repayment basis.
Why Would You Use a Mortgage Advisor for Further Borrowing?
While the idea of borrowing additional money from your mortgage company is an easy one, the reality can be complex to deal with. That’s where coming into contact with the services of a seasoned mortgage advisor like Oportfolio Mortgages comes in.
How can we help?
Personalised Advice: We consider your personal financial situation to ensure further borrowing is in your best interest.
Lender Policy Changes: We stay up to speed with lender policies (like NatWest’s new standalone ADBO guidelines), so you don’t have to.
Maximise Your Choice: We will compare if further borrowing, a remortgage, or other lending product is the value for money option.
Application Support: From filling out forms to negotiating with the lender, we take the hassle out of the process.
FAQs About Additional Borrowing Mortgages
1. What is the difference between additional borrowing and remortgaging?
Additional borrowing means borrowing more money from your current lender without altering your current mortgage. Remortgaging usually means switching to a new lender completely.
2. Can I use the money from the additional borrowing on whatever I want?
Generally, yes. Common uses include home improvements, education costs, or support for family members. If, however, debt consolidation borrowing is the purpose, there may be other conditions and LTV limits.
3. What is NatWest’s new standalone further borrowing product?
Between £10,000 and £500,000 depending on affordability tests and loan-to-value (LTV) limits.
4. Must I wait until my product transfer window?
No, that’s the key difference. NatWest’s individual process allows you to apply at any point during your mortgage term.
5. Why would I speak to a mortgage advisor instead of going direct?
Advisors like Oportfolio Mortgages can clarify if additional borrowing is the answer, guide you through the eligibility, and make sure you don’t miss out on something better.
Speak to a Mortgage Advisor
NatWest’s new standalone additional borrowing product is a welcome innovation, allowing homeowners to take control and be more flexible. Whether it’s to renovate, pay off debts or finance a life event, this could be an inexpensive way to borrow. We have experience at Oportfolio Mortgages of guiding customers through the further borrowing process. If you are interested in increasing your mortgage, speak to our experts today to see if this new NatWest product is for you.
