Use savings or take out against mortgage

katalinetball

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

ACG

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.

katalinetball

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

With 2 years to run on your mortgage the monthly repayments would be high.

bluesnake

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.