What is Further Advance?

Full Definition

A further advance is additional money borrowed from a homeowner's existing mortgage lender, secured against the same property and typically added under the same first charge already registered, rather than being arranged as a separate second charge loan or a full remortgage to a different lender. Because the existing lender already holds the mortgage and knows the property and the borrower's payment history, a further advance can sometimes be arranged more quickly and with less paperwork than switching lenders entirely, though the interest rate offered on the additional amount is often different -- and sometimes less competitive -- than the rate on the original mortgage balance, since it is priced as new lending rather than as part of a remortgage deal shopped around the wider market. Common reasons for taking a further advance include funding home improvements, raising a deposit for a buy-to-let or second property, or consolidating other debts, and the lender will reassess affordability for the additional amount using its current lending criteria, which may be stricter than when the original mortgage was taken out. A further advance is generally a simpler option than a second charge mortgage when the existing lender is willing to offer competitive terms, but it is worth comparing both routes, alongside a full remortgage, since the best value option depends on current market rates, any early repayment charges on the existing deal, and how much additional borrowing is actually needed.

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