2nd mortgage to fund extension advice needed

pjc1405

Hi, this is my first post on this forum, due to all the good advice I'm hoping someone can help.
We are currently embarking on a £60k house extension. Our current repayment mortgage is £108k with C&G on a fixed rate of 4.29 due to end 31/05/11. There are 14 years remaining on the mortgage.
House value pre extension approx £260k, after (hopefully at least) £320k.
We have £20k savings so need to borrow between £40-50k to pay for and finish the extension.
C&G have approved a £40k second mortgage on a 2 yr fixed rate of 6.19%, and our current repayment will go to the standard variable rate of 2.5% at the end of May.
The trouble is - and this is where I need the help - we need the £40k before our fixed rate ends. Will we be better taking the £40k at 6.19 over 2 years and letting the £108k go to SVR, or is there a short term way of borrowing the £40k for the 4 months we need it for and re-mortgage the whole amount with another lender?
Our ERC (?) is just under £3000.
We have a LTV of approx 48%, no adverse credit, one car loan of £11k which we do not want to consolidate. Income multiple of 3 x joint salary more then covers total needed of £160k.
Thanks in advance everyone!
PJC

pjc1405

Further to my recent post i realise 10pm on a Saturday night is not the optimum time for mortgage experts to be online!
Am hoping someone may pick this up tomorrow morning

dimbo61

C&G have approved the extra lending even at 6.19% so you can get the money asap.
Now your existing mortgage goes onto the SVR which is 2.5% so cheaper than your current fixed rate and you will be saving money.
Paying £3000 as an ERC is expensive.
You have history with C & G and have the money to finish off the extension.
Posting on this forum without giving all the info (what type of mortgage ie fixed/tracker/offset etc)
If you can overpay and be Mortgage free early.
2.5% interest on your mortgage is a very good rate unless you need the security of a fix

pjc1405

dimbo61 wrote: »

C&G have approved the extra lending even at 6.19% so you can get the money asap.
Now your existing mortgage goes onto the SVR which is 2.5% so cheaper than your current fixed rate and you will be saving money.
Paying £3000 as an ERC is expensive.
You have history with C & G and have the money to finish off the extension.
Posting on this forum without giving all the info (what type of mortgage ie fixed/tracker/offset etc)
If you can overpay and be Mortgage free early.
2.5% interest on your mortgage is a very good rate unless you need the security of a fix

Thank you - sorry didn't give info as to type of mortgage - it's a 2 year fixed on 6.19% or they offered a 2 yr tracker at 5.49%.
Just trying to work out if taking 2 seperate mortgages at 2 different rates will work out less or more expensive long term.

dimbo61

You need the money now ? and you cant have 2 mortgages from 2 companies on the same property ( would be very expensive)
So you are stuck with C&G but you will save money on large part of mortgage when it goes onto SVR

dimbo61

Only thing I can add is once extension is built and you do have any spare money is too overpay the expensive part at 6.19% ( if allowed so check!)

getmore4less

Does the £60k include the contingency overrun costs.

If not you could come unstuck if costs go over.