Additional borrowing when moving

Additional borrowing is the extra amount you need on top of your current mortgage balance to purchase a more expensive property. The funds come from a combination of your existing equity and new lending.

For example, if you sell your current home for £300,000 and owe £180,000, you have £120,000 of equity. If your new home costs £400,000, you need a total mortgage of £280,000 (the £400,000 price minus your £120,000 equity). The additional borrowing is £100,000 (£280,000 minus your existing £180,000 balance).

Whether you’re porting with a top-up or getting a fresh mortgage, the lender assesses your total borrowing against the new property. They’ll run a full affordability check covering your income, expenditure, existing debts, and dependants.

If your income has increased since your original mortgage, you may find you can borrow significantly more than you expect. Conversely, if you’ve taken on new commitments (car finance, larger family, reduced income), the lender may offer less than you need.

This is where speaking to a broker before making an offer on a property is invaluable. They’ll tell you your maximum budget so you house-hunt with confidence.

If you’re buying a property that needs work, you can often include the renovation costs in your additional borrowing. The lender will assess affordability on the total amount, and you’ll receive the full sum at completion.

Some buyers prefer to borrow a conservative amount at purchase and then remortgage later once the renovations are complete and the property has increased in value. This can give you access to a better LTV and rate. Your broker can advise on the best strategy for your situation.