£500k for under a year

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caronoel
caronoel Posts: 908 Forumite
I've been Money Tipped!
in Savings & investments
Am currently remortgaging on my main home to do an extension next year.

Cost will be about 600k, of which we need to borrow 500k.

The money is expected to come through in January as the work commences, but we won't need to pay most of the cash to the builders until late 2017

Any suggestions on where to invest the cash short term, to mitigate some of the mortgage costs until the works are complete?
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  • le_loup
    le_loup Posts: 4,047 Forumite
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    You are looking for short term savings - not investments. You need five to ten years for investments.
    For large amounts of short term savings, look at NS&I.
  • ColdIron
    ColdIron Posts: 9,054 Forumite
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    Agree, NS&I are the only practical game in town for you. As an extension of the treasury they are not known for haste so I wouldn't leave making arrangements until the last minute
  • bigadaj
    bigadaj Posts: 11,531 Forumite
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    Can you not delay drawing down the mortgage until you actually need it, would be a more profitable option I'm sure.
  • chucknorris
    chucknorris Posts: 10,786 Forumite
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    bigadaj wrote: »
    Can you not delay drawing down the mortgage until you actually need it, would be a more profitable option I'm sure.

    That's exactly what I was thinking, also that is one hell of an extension, costing that much.
    Chuck Norris can kill two stones with one birdThe only time Chuck Norris was wrong was when he thought he had made a mistakeChuck Norris puts the "laughter" in "manslaughter".I've started running again, after several injuries had forced me to stop
  • caronoel
    caronoel Posts: 908 Forumite
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    bigadaj wrote: »
    Can you not delay drawing down the mortgage until you actually need it, would be a more profitable option I'm sure.


    Tried that option with the bank but no joy
  • caronoel
    caronoel Posts: 908 Forumite
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    chucknorris wrote: »
    That's exactly what I was thinking, also that is one hell of an extension, costing that much.

    Extra 800 square foot on an existing 3500 square foot area. Also need to replace the garage, and redecorate the entire place.

    500k sounds a lot, but it quickly mounts up
  • chucknorris
    chucknorris Posts: 10,786 Forumite
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    caronoel wrote: »
    Extra 800 square foot on an existing 3500 square foot area. Also need to replace the garage, and redecorate the entire place.

    500k sounds a lot, but it quickly mounts up

    That still sounds an awful lot, even if you allowed a whopping £50k for the garage and decorating, that's still over £6k/m2 for the extension, that's a hell of a high spec, is there something very unusual about the plot/building? Or are you actually buying land adjacent to your property to build on?
    Chuck Norris can kill two stones with one birdThe only time Chuck Norris was wrong was when he thought he had made a mistakeChuck Norris puts the "laughter" in "manslaughter".I've started running again, after several injuries had forced me to stop
  • caronoel
    caronoel Posts: 908 Forumite
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    chucknorris wrote: »
    That still sounds an awful lot, even if you allowed a whopping £50k for the garage and decorating, that's still over £6k/m2 for the extension, that's a hell of a high spec, is there something very unusual about the plot/building? Or are you actually buying land adjacent to your property to build on?

    The whole interior needs redoing to be honest. The property currently has six beds, but most of them are odd sizes and not really usable. So the whole thing needs to be reconfigured and much of the roof will need replacing too.

    We bought the place out in the wilds of Surrey a couple of years back with the aim of doing it up as our dream home.

    Now is the time....

    As against all that, I do miss the buzz of London, but my clubbing til 2am days are long over now that I am in my early 40s
  • slowpoke_rodriguez
    slowpoke_rodriguez Posts: 307 Forumite
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    caronoel wrote: »
    Tried that option with the bank but no joy

    This sounds very strange. Wouldn't a mortgage company want to see what they're getting for their money as the project progresses?
  • Pincher
    Pincher Posts: 6,552 Forumite
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    I expect you got a rather good fixed rate, which has to start on the dot, because the lender arranged a money market deal starting then.

    Self builds tend to be paid in phases, as there is nothing for collateral to begin with. Practically speaking, a shell with no roof is not worth anything either, but the one lending the money call the shots.

    An extension is less stressful for the lender, as they can always throw you out and sell the main building. Very comforting, FOR THE LENDER.
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