Different lenders have different affordability calculations and so as you only want to increase your total borrowing by 5% it is quite possible that a different lender would offer you the extra £26,000. However, switching your mortgages from Woolwich now would incur an early repayment charge and, as you have a good rate, you would probably also end up paying a higher one if you moved. This would make the effective cost of borrowing the extra £26,000 very expensive.
An alternative which would almost certainly be better value would be to take a second charge mortgage on the “commuter shoebox”. As the £100,000 mortgage on this property represents an LTV of only 50%, a £26,000 second charge would only take the LTV up to 62.5% and this is well within the maximum LTV a second charge lender would offer. Also this type of lender is often a little more generous with the affordability calculation. The second charge would normally have to be on a repayment basis but, subject to your age, this could be over 25 years. The interest rate would be significantly higher than your main mortgage but as it would only be a small loan the monthly payments would not be very high and it would not increase the average overall rate on your mortgages very much.
An alternative which you might get at a cheaper interest rate is an unsecured loan, although the maximum term for such a loan is 10 years, thus making the monthly payments higher. Also the normal maximum for an unsecured loan is £25,000 and so if you go down this route you might need to use two different lenders.
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