A further advance from your existing lender

A further advance is extra borrowing from the lender you already have your mortgage with. Rather than taking out a brand new loan with a different company, you go back to your existing lender and ask them to lend you more, on top of the balance you already owe. Depending on the lender, that extra borrowing is either added to your existing mortgage as one combined balance, or run alongside it as a separate sub-account with its own rate and term, sitting on the same mortgage account.

This is different from both of the other main routes homeowners use to consolidate debt. A secured loan, also called a homeowner loan or second charge mortgage, comes from a completely separate lender in a different part of the market, sitting behind your existing mortgage as its own agreement. A remortgage to pay off debt means leaving your current lender altogether and taking out a new, larger mortgage somewhere else, or with the same lender on a new deal. A further advance is the only one of the three where you stay with the lender you already have, on top of the mortgage you already hold, without needing to remortgage or apply to a new lender from scratch.

Because you're not switching lender or remortgaging, a further advance can sometimes be quicker to arrange than a full remortgage, and it avoids the process of finding and applying to a new provider. That doesn't make it automatically cheaper or simpler, though. The rate a lender charges on a further advance is usually its own separate further-borrowing rate, not the rate on your existing deal, and it's worth understanding that difference before assuming a further advance is the easy option.

The clearest way to think about the three routes is by who you're borrowing from and what happens to your existing mortgage. With a further advance, you borrow from your current lender, and your existing mortgage deal generally stays in place, though some lenders link the further advance to the same account or review your overall terms as part of the process. With a secured loan (homeowner loan, second charge mortgage), you borrow from a different, specialist lender entirely, your existing mortgage and its rate are left completely untouched, and the two debts run side by side with two separate lenders. With a remortgage to pay off debt, you replace your whole mortgage with a new one, which may mean a new lender, a new rate, and potentially an early repayment charge if you're still part way through a fixed deal.

This matters most if you're currently on a good fixed rate. Leaving a fixed deal early to remortgage usually triggers an early repayment charge, which can run into several thousand pounds depending on how much of the fixed term is left. A further advance and a secured loan both avoid that charge, because neither one requires you to leave your existing mortgage deal. The difference between those two then comes down to which lender's rate and criteria work out better for you, and whether your existing lender offers further advances for debt consolidation at all.

There's no single right answer here. A homeowner with a strong relationship and a low loan to value with their existing lender might find a further advance is the most straightforward and reasonably priced route. Someone whose existing lender doesn't offer further advances for debt consolidation, or whose lender's further-borrowing rate is uncompetitive, might do better with a secured loan from a specialist lender instead. A broker who can see further advance criteria, secured loan rates and remortgage options together is in a much better position to tell you which applies to you than guessing from general rules of thumb.

Further advances aren't universal. Some mortgage lenders don't offer them at all, some only offer them for specific purposes such as home improvements rather than debt consolidation, and some will only consider one if you've been with them for a minimum period or have a set amount of equity. This is one of the most common reasons homeowners end up looking at a secured loan instead: their existing lender simply doesn't do further advances for the purpose they need, or the maximum amount on offer isn't enough to clear their debts.

Where a lender does offer further advances for debt consolidation, they'll assess it in broadly the same way as any other secured lending. They'll look at your loan to value, meaning your total borrowing, existing mortgage plus the new further advance, as a proportion of your property's value. Most lenders won't go above somewhere between 75% and 90% loan to value in total, though the exact limit varies by lender and by your circumstances. They'll also run an affordability check based on your income and outgoings once the new combined payment is in place, and they'll look at your credit history, since a further advance is still a form of secured borrowing and lenders need to be confident you can keep up the payments.

A missed payment or a default on your file doesn't automatically stop a further advance being an option, though it can narrow which lenders will consider one, and your own existing lender may take a more cautious view than a specialist secured loan lender would. If your existing lender isn't willing to lend more, or their terms don't work for you, that's not the end of the road. A whole-of-market broker can check further advance criteria across a range of lenders where relevant, and compare that against secured loan and remortgage options from lenders who work with a broader range of circumstances. Our bad credit hub covers this in more detail if your credit history isn't clean.

Because a further advance usually sits on your mortgage rather than as a separate product, lenders typically price it closer to a mortgage rate than a secured loan rate, spread over a longer term such as the remaining term of your mortgage. That can mean a lower monthly payment than a secured loan, though it also means the debt is often repaid over a much longer period, so it's worth seeing both figures side by side rather than looking at the monthly payment alone.

In this example, the monthly outgoing falls from £426 to £109, a reduction of £317 a month. The total repayable over the full 20-year term, £26,160, is higher than the £16,000 originally borrowed, because the debt is now spread over a much longer period than the original credit card and loan terms would have taken. As with any of the three routes, a lower monthly payment and a higher total cost over time can both be true at once, and a good broker will always show you both figures rather than just the one that looks best.

A further advance turns unsecured debt, credit cards, personal loans, an overdraft, into debt secured against your home. If you fall behind on your combined mortgage payment afterwards, your home could be repossessed. That's true of any of the three consolidation routes, but it's worth restating clearly here, because a further advance can feel like a small administrative step with your existing lender rather than a new borrowing decision. It is a new borrowing decision, and it deserves the same care as applying for a secured loan or a remortgage would.

The rate on a further advance is usually the lender's own separate further-borrowing rate, and it is not the same as the rate on your existing mortgage deal. Some lenders price further advances close to their standard variable rate, which can be higher than the fixed or discounted rate you're currently enjoying on the rest of your mortgage. It's worth asking your broker to confirm the exact rate that would apply to the further advance itself, rather than assuming it matches your existing deal, before you compare it against a secured loan.

There's also no guarantee your existing lender will say yes. Because a further advance depends entirely on one lender's own criteria, if they decline, you don't automatically have a fallback within that same application, and you'd need to look elsewhere, most likely a secured loan or a remortgage with a different lender. This is another reason it's worth having a broker look at all three routes together from the start, rather than approaching your existing lender alone and only considering the alternatives if they say no.

Finally, as with any consolidation route, spreading debt over a longer term generally means paying more interest in total, even where the monthly payment is lower. Check whether your lender allows overpayments without penalty, many mortgage lenders allow up to 10% of the balance to be overpaid each year, so any spare budget can be used to clear the further advance faster than the contractual term requires, if that suits your circumstances.

A further advance tends to suit homeowners who have a reasonable amount of equity, a straightforward relationship with their existing lender, and a lender who is happy to offer further borrowing for debt consolidation. If any one of those isn't true for you, a secured loan or a remortgage may well work out better, and it's worth ruling a further advance in or out early rather than assuming it's always the cheapest of the three.

If your existing lender doesn't offer further advances at all, or won't allow the money to be used for debt consolidation, a secured loan from a specialist lender is usually the next place to look, since it leaves your current mortgage deal untouched in the same way a further advance would. If your existing mortgage deal has already ended, or your lender's further-borrowing rate turns out to be uncompetitive, a remortgage to pay off debt might work out cheaper overall, particularly if you'd benefit from a better mortgage rate on the whole balance rather than just the new borrowing.

And if your total unsecured debt is relatively small, under roughly £5,000, it's worth checking whether the fees involved in arranging a further advance, valuation costs and lender fees in particular, actually outweigh the interest saving compared with simply paying it down directly or using a 0% balance transfer card instead. A broker can run these comparisons for you rather than you having to work them out alone, and will tell you honestly if none of the three routes make sense for your situation right now.