WWYD - Home Improvements

Cottage_Economy

I would not remortgage and take on secured debt to pay for a new kitchen or bathroom.

If anything happened to either or both of you, such as a long-term redundancy or permanent illness, that higher mortgage payment could become a millstone round your neck and drag you down. You risk the roof over your head.

If you don't want to save up for them and want them done soon, I would look at an unsecured loan.

That way if you ever run into financial difficulties, your loan will be separate from the roof over your head.

justme111

Kitchen and bathrooms can be done from virtually free to sky is the limit depending on money that you have. I would not even think about increasing my mortgage debt on that amount of interest that you apparently paying to have them done.

freda

From playing with the numbers, I'd guess that the £75k mortgage you are proposing will be at about 4% for the 5 year fix, with 10 years at an unknown interest rate after that. (I'm assuming it is repayment mortgAge?)

Borrowing 15k at 4% over15 years will cost you an additional 5k in interest. If interest rates rise and you average even just 6% over 15 years you'll be paying almost 8k more.

My suggestion would be to aim to replace the kitchen when it is 15 years old, so in 2 years time. Save the £100 pcm and work out a way to save another 200 pcm (see the debt free wannabe board, old e style money saving board etc) and in 2 years you'll have c.7.5 k in the bank (guess at 3% interest) You can get a good kitchen for that!)

quantumleap

Thanks for your thoughts folks. Always nice to have a bit of independent advice - much appreciated.

It's very easy to look at the monthly payment and convince yourself that as you aren't paying anything more per month thats its a good idea to add 15K to the headline figure.

I still think there is an argument that says that it is as cheap a loan as you are likely to get but I also get that it's only for 5 years of a 15 year term so lots can change.

I'm inclined to reduce the payments or the term!

justme111

As said before , why not.to shop around for a better rate . 4% on.your ltv is too much

74jax

quantumleap wrote: »

We have the opportunity to remortgage on another 5 year fix that will either reduce our payments in the region of £100 P/M or we could borrow an additional 15K, increase our remaining term from 13 years to 15 years and pay no more than we are currently paying.
So that age old question on these forums, what would you do?

I don't really understand, sorry my fault, but how much are you borrowing if you're paying £15k back. Or do you mean you're borrowing this interest free so paying no more?

theoretica

I would look around the house carefully and prioritise. There are probably some things which wouldn't cost that much but would make quite a difference - paint, tile grout, shower curtains, handles/taps. Unless you really want to make a major layout change worn out pieces can be refreshed without needing to change the perfectly good bits. Do really want to be paying for these improvements in 15 years time? That is what extending the mortgage would do to you.

getmore4less

If you are going to revamp your house every 15 years you need to plan for the next one at £15k thats another £100pm you need to save.

Also depends what needs doing and how much you can salvage from what you have and how much you can do yourself.
............
as an example ,
I was costing up a refit for a 20yo, using a 18unit ex display good ish quality and good appliances(£1500+ hob,sink,fridge extractor, micro,oven) is was heading towards £10k maybe more depending what we did with the floor and how much of the display we could salvage eg fancy splashbacks that could break.
That was with most of the cuurent appliance on their last legs needing changing anyway so a gut back to bare walls, move some electrics, minimal plumbing/gas and have fitters do most of the work, maybe just finish off the painting/tiling.
..............

Longer term you need to have a decent house maintenance fund to do the jobs and replace things how much do you budget for that now?

Perhaps a stratagy where you borrow say £10k to kick start then add at least £200pm and start planning projects

Back to mortgages £60k over 15year £540pm is 7% ouch! (edit: see below)

whats the follow on rate?

Uless you have some credit issues you should be down under 2.5%

HSBC 60% LTV £70k 2.3% lifetime tracker over 15 years £460pm(cheaper if a customer)

budget £200pm into the pot start the projects on a 3-5 year plan and overpay if any money left over or save for the next refurb cycle.



EDIT: woops the cuurent one is 13 years do 5.5% not 7%

quantumleap

getmore4less wrote: »

If you are going to revamp your house every 15 years you need to plan for the next one at £15k thats another £100pm you need to save.

Also depends what needs doing and how much you can salvage from what you have and how much you can do yourself.
............
as an example ,
I was costing up a refit for a 20yo, using a 18unit ex display good ish quality and good appliances(£1500+ hob,sink,fridge extractor, micro,oven) is was heading towards £10k maybe more depending what we did with the floor and how much of the display we could salvage eg fancy splashbacks that could break.
That was with most of the cuurent appliance on their last legs needing changing anyway so a gut back to bare walls, move some electrics, minimal plumbing/gas and have fitters do most of the work, maybe just finish off the painting/tiling.
..............

Longer term you need to have a decent house maintenance fund to do the jobs and replace things how much do you budget for that now?

Perhaps a stratagy where you borrow say £10k to kick start then add at least £200pm and start planning projects

Back to mortgages £60k over 15year £540pm is 7% ouch! (edit: see below)

whats the follow on rate?

Uless you have some credit issues you should be down under 2.5%

HSBC 60% LTV £70k 2.3% lifetime tracker over 15 years £460pm(cheaper if a customer)

budget £200pm into the pot start the projects on a 3-5 year plan and overpay if any money left over or save for the next refurb cycle.



EDIT: woops the cuurent one is 13 years do 5.5% not 7%

Thanks for this - makes interesting reading. Just to clarify, the mortgage was taken out 5 years ago, was obviously more than 60K then and the rate was 4.79%.

onlyroz

Firstly, you should be able to get a better mortgage deal than your current one so make sure you shop around.

As for kitchens, check out whether you can get a 0% deal. We recently purchased a B&Q kitchen at 0% over 4 years. Far better than adding that money to the mortgage paid back over 15 years. Other manufacturers probably offer similar deals.