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Use savings or take out against mortgage

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Hi all

Looking for some advice, maybe someone with a mathematical mind!!

I am adding an extension to my house at a cost of £21000. I have £15000 in cash and £6000 in shares which could be used, but would really be using all my savings. I could get a further advance on my mortage at a rate of 2.64% over 2 years as that is all i have left on my term.

I have a savings account which pays 2.8% and another which allows me to pay £250 per month at a rate of 6%. What I would like to know is it worth keeping my money in these accounts and drip feeding it into a further advance on my mortgage or would the interest I make be negligible. Hope someone can help. thanks

Comments

  • ACG
    ACG Posts: 24,551 Forumite
    Part of the Furniture 10,000 Posts Name Dropper I've helped Parliament
    Do you pay tax on yoru savings or are they ISAs?

    Personally for the small amount of interest it will cost/save you. I would do whatever is the most convenient.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • Hi ACG

    Thanks for your reply. They are Nationwide savings accounts not ISA's but I am not a tax payer and receive gross interest.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    With 2 years to run on your mortgage the monthly repayments would be high.
  • bluesnake
    bluesnake Posts: 1,460 Forumite
    will you get that £21000 back when sell, or will it make your house worth £21000+ more. Is your house below the market value for the area?

    £21000 on top of the current value, could be a bigger or different house.
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