Mortgage Switching - New borrowings since drawdown.

My partner and I are newly on a one year fixed rate for our first house. We're over 100k lower than our max 3.5 times what the bank offered in our AIP.

We're potentially going to borrow 30-50k from the Credit Union and use our own savings for building/renovations and to get a car. Will this, in people's experiences, present an issue if we look to switch lender in a year to avail of better rates? We'll have same/better salaries but debt whereas we are debt free apart from mortgage now.

I understand the underwriting process might be a little different (and easier) for switching versus a new mortgage but haven't found anyone I've talked to in same circumstances. Cheers.

All borrowings will be taken into account when re-financing in exactly the same way they are for a new mortgage, as what you are looking for is just that, a new mortgage.

So while you had headroom in the 3.5 LTI threshold, your repayments on this finance may push you towards the limit on affordability criteria. A good broker or the mortgage advisors at some of the main banks should be able to give you an indication in advance of applying.

I have been told by a few lenders in the past to clear car loans in advance of applying, as they will assume someone with outstanding car finance will typically buy a new car with finance one the current loan is payed off, thus having a pretty significant impact on their affordability calculations.

Would you consider holding off on the renovations and applying for a mortgage top up when your fixed rate expires? How urgent is the need to buy a car? You will pay a far higher interest rate with the CU than you would for a mortgage.