Why is the mortgage offer lower?

[Mortgagehelpplease1]

we need to borrow more on our mortgage to pay for some home improvements. The alternative is we move house.

say for ease:
mortgage was 200K
house valued at 300k (based on Nationwide valuation)

for additional borrowing, Nationwide’s calculator says, once taking into account the 200k, 300k and household income, we could borrow another 50K for home improvements.

if i input the same figures as if i was a first time buyer, with the same amount of equity (100K), the overall total amount i could take out as a mortgage is much less than the 200k current mortgage plus 50k further advance.

Can anyone explain why that is?
I must be missing something?

If you are inputting the figures as if for a FTM though it will be counting 100k as a deposit -so cash.

^It’s important to note that taking on additional borrowing could make it more difficult to remortgage to a better deal in the future. This is because it increases your loan-to-value (LTV), which is the size of your loan compared to your home’s current value. If your home is worth £200k and your outstanding mortgage is £150k, your LTV is 75% (150/200 = 0.75).
Usually, the lower your LTV, the wider your choice of mortgage deals.

Thanks @HappyTalkingTalkingHappyTalk

But wouldn’t the same LTV apply if all details are the same (income, house price, deposit/equity) and therefore the amount they are prepared to loan me would be the same regardless of whether its as a new mortgage or an old mortgage plus additional borrowing. Sorry i’m sure i’m making it more complicated than it needs to be!

As for our LTV, currently its 69% and additional borrowing would bump it up to 75.5% so i assume we’ve got a while to go before we see better rates for us!😄

Are you putting in the figures as a FTB as a new nationwide customer? Ie you're not logged into your account? In which case you're probably getting an offer which is more generous because you've got a decent credit history with them.

As a FTB you would be buying a 300k house, I assume you could put in a 50k deposit and borrow 250k and use the 50k you have for home improvements.

Basically additional borrowing is not the same as a single ordinary mortage - there are different risk factors, and so doing what i suggest above is likely to give you a different interest rate offer.