Education is one of the most valuable investments a family can make, but the rising costs of private school and university fees can place significant financial strain on households. Whether you’re grappling with the added VAT on private school fees or planning ahead for university expenses, refinancing your mortgage may be a practical solution. Here’s a look at the options available and how they could work for you.

Remortgaging involves replacing your current mortgage with a new one, either with your existing lender or a new provider. By doing this, you may be able to borrow additional funds against the equity in your home to cover education costs. This often allows you to take a lower rate and longer repayment terms than  unsecured/personal loans, making monthly payments more manageable.

Key Benefits:

• Potentially lower interest rates compared to personal loans.
• Simplifies your finances by combining your mortgage and education funding into a single payment.

Considerations:

• Early repayment charges may apply to your existing mortgage.
• Your monthly payments and overall secured debt may increase.

A further advance is an additional loan from your existing lender, secured against your home. This option allows you to keep your current mortgage in place while borrowing extra money to fund education expenses. This is often a good solution when you are tied into a deal with a lender as it avoids early repayment charges and allows you to retain your current deal if you wish to.

Key Benefits:

• No need to switch lenders, which may simplify the process.
• Often available at competitive interest rates.

Considerations:

• Approval depends on your financial situation and your lender’s criteria.
• Adds to your overall mortgage debt, which could impact future borrowing.
• Failure to repay could put your home at risk.

A second charge mortgage is a separate loan secured against your property, leaving your existing mortgage untouched. This could be a good option if you’re on a favorable mortgage deal or face early repayment charges for switching. It also can offer different criteria for acceptance than a remortgage or further advance, for example credit score thresholds, affordability calculations and loan to value restrictions. This service is provided through third party referral.

Key Benefits:

• Retain your current mortgage terms and rate.
• Borrow larger sums if you have substantial equity in your home.

Considerations:

• Interest rates on second charge mortgages are typically higher than standard remortgages.
• Failure to repay could put your home at risk.

Before making any decisions, talk to a Mortgage Advisor. At Mallory Financial we can assess your situation, guide you through the available options and ensure that you are given the right advise that aligns with your needs.

Take a proactive approach 

We can simplify the mortgage process for you and help secure you a great mortgage deal in the process. 

Contact the team on 01565 874 246
Email: hello@malloryfinancial.co.uk