Want to build an extension - best way to finance

zulupamela

Hi,
Our house is worth £475,000 and we have £7,000 remaining on our mortgage. We want to extend the house at an estimated cost of £80,000. We have £30,000 in savings accounts and £22,000 in cash ISAs. We have shares in PEPs worth approximately £30,000.

Need help to know whether we should get an interest only morgage, refinance our mortgage or go for an offset. We are both 53 and our plan is to sell in 8-10 years and downsize. No faith in pension - extending to maximise the potential value, extra space is not really needed.

Any help would be most appreciated.

Pam

UK007BullDog

Well......., you are asking investment questions. Mortgage brokers are not allowed to give investment advice.

From a personal point of view if I were you I would take my savings to pay for the extension and then build up the savings again, instead of paying thousands of pounds of fees for a mortgage and then pay interest on the mortgage..... Its cheaper to use money you already have than to borrow, with the interest rates going up that is what I would do. Also your age and future plans play a role in it as well.

Have you looked that an extension will truly enhance the value of the property? Are houses in your area all the same as yours? Is it really worth doing that? Did you do your research? Dont take estate agents words for it but do your own research.