75% or 65% mortgage

Made_Without

Hello

I'm a mortgage-free wanabee in the making, still at the stage of sorting out my mortgage.

I'm a FTB who has been saving like mad over the last few years and am in the position where I have a fair bit saved.

I'm in the process of trying to buy a place which looks in relatively good condition (no survey done as of yet). But I would like to modernise - paint rooms, flooring, new kitchen, bathroom and possibly extend into the roof.

My dilema is now trying to work out between going for a:

75% mortgage - a nice lump sum of money remaining (mainly in unconsolidated ISAs) which would allow me to do the work mentioned above.

or

65% mortgage - would still leave me with around 20k, clearly not enough to do all the above, but with lower monthly repayments, I could save more and do the work - just will take longer.

What sounds like a better idea?
I get that with 65% - I wont be paying any interest on the deposit put down.
But is is worthwhile breaking up the ISA tax wrappers to do this?

If I keep to the 75% - does it make sense to consolidate the ISAs? Im worried I wont be able to break into individual wrappers to pay for the work - despite possibly getting a better rate.

The above explanaition probably makes it clear that I am a bit clueless as what to do - all comments appreciated

C*F

originalmiscellany

a conservative viewpoint, I'd say take the 65% loan..
a) Less pay per month
b) When mortgage increases, you pay proportionately less
c) It allows you do do your DIY over stages rather than in one go (A good thing I guess!)
d) Currently ISA rates are so low, it'll be better to use it to clear your mortgage...
e) What about the option of getting an offset mortgage - thus having your your lower rate, but also available for DIY should you have a sudden urge? (I know it's only the 20k, but it'll be a good option I think)

Made_Without

Thanks, I think overall I agree with you - it makes sense to err on the side of being conservative currently.

C*F

GavB79

Unless you're going really top-end, 20k should get you a new kitchen/bathroom, lick of paint etc. - everything bar the loft extension I would think. And as mentioned, ISA rates are not going to beat your mortgage rate so you may as well pay it down.