Remortgage for extension using estimated future house price

JdG_2

Currently considering doing an extension to my house. Currently have loan-to-value of c.70% on my mortgage but doing an extension would decrease this drastically to c.65% after the work is finished (turning a 2-bed semi into a 4-bed family house).

My question is whether or not my bank will allow me to extend my mortgage to a level that would be roughly 90% of the old value of the house. I.e., Can I use an estimated future value to remortgage my house to finance the extension?

Let_Us_See

Your post doesn't make sense. You ask if you can borrow up to 90% LTV on old (current?) value, and then if you can use the future potential value to finance extension?

Subject to affordability and your current provider lending to 90% LTV, you could finance this way. However, no lender will accept future value as you may never finish, or even start, the project.

kingstreet

TBH, LUS is right and the only way you're going to get an unequivocal answer to this is to ask your lender. Many top out at 80% for additional borrowing.

JdG_2

Apologies for the confusion. My current mortgage only permits 80% LTV. To do the extension would take the borrowing above this limit assuming the current value of the house.

Sounds like this is a non-starter though. I was hoping that the release of the additional borrowing could be linked to the works in some way but it sounds like this is probably not possible?

amnblog

you are asking to borrow against the value of a property that does not exist.

JdG_2

Thanks amnblog. That's a pretty definitive answer that will stop me looking like a complete idiot with my bank! :-)

kingstreet

What about a remortgage to a lender that will allow you to borrow upto 90% for home improvements?