Sometimes used by: People who keep their cars for a long time before changing and want to spread the cost over a longer period of time than a typical 3-4 year dealer finance agreement.

At the beginning of the agreement

You organise with your mortgage provider to borrow money, either by withdrawing equity from your home or by getting a second-charge mortgage. When the money has been transferred to your bank account, you are then able to choose the car and pay the dealer with the money you have borrowed from your mortgage provider.

During the agreement

You repay your mortgage provider in accordance with the terms that you have agreed. If you have withdrawn any equity from your property then you will immediately become the owner of the car you have purchased.

At the end of the agreement

You will need to continue paying the mortgage provider until the loan is paid off in full. Your house could be at risk of repossession if you do not keep up the regular repayments in accordance with the agreement you have entered into.

Advantages of mortgage top-ups

  • Affordable monthly repayments.
  • Repayments are spread out over a longer period of time than a typical 3-4 year dealer finance agreement.

Things to remember

  • You will have to continue paying your loan even if you sell the car.
  • While your individual repayments may be lower over a longer term, the total amount of interest paid may be significantly higher.
  • Funding a purchase this way can significantly increase the total cost of your car because of the longer duration of the mortgage agreement.

 

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