What is an advance?
An advance is an additional loan on an existing mortgage. It is also known as a further advance, as it means you are seeking to add borrowing to your current mortgage.
Things to note when considering an advance on your mortgage
If you did opt to add more onto your existing home loan like this, it would be with your current lender. Therefore, you cannot compare deals or go with any other lender’s interest rates.
Opting for an advance is an alternative to changing your loan to another lender. There could be various reasons why you may not want to do this. If your existing lender offers a competitive rate, seeking an advance might be preferable – and more affordable – to switching to someone else, for example.
An advance might be worth thinking about if you want to improve your home in some way, such as by adding a conservatory or extension, or renovating the existing building. You could also think about an advance to release cash to fund another property purchase.
A word about mortgage rates
You should note that your existing mortgage rate won’t apply to any advance you might be able to get. You would typically pay for anything you borrow on top of your main loan at a different interest rate. Hence why it is a good idea to look around to see if a change of mortgage might be a better option. An advance is merely one way to release additional cash if your property has increased in value and there is equity to draw on.