Advice on a remortgage before end of 5 year term

didgemaster

I took out a 5 year fixed mortgage @3.89%. I have 15 months left on the term of the mortgage. There is an early payback fee of £2000. I want to borrow an extra £15000 to build an extension. my LTV would be 58%. I can not decide what to do.

What would you suggest?

kingstreet

You need to find out if your existing lender will allow additional borrowing. This will be at a different rate to your current mortgage and your current deal won't be affected.

Now, research remortgaging to a new lender. This means a new mortgage with a new lender where you (subject to current equity/loan to value) borrow enough to repay your existing mortgage and cover the cost of your improvements.

Make sure you factor-in the penalty on your existing mortgage and any transfer costs to ensure you properly compare the options.

dimbo61

Can you build the extension for £15,000? are you in the trade ?
If you look at your existing lenders website you may find what rates they have for existing customers who want to borrow more money.
Now LTV is important but you may need to go through the whole MMR checks ( Income, age, credit score etc)
You may also find remortgaging to a new lender might be cheaper in the long run ( Taking another long term fix before rates rise)
Consider Offset mortgages and fixed deals, That way you can keep the building funds in the offset until needed to pay for work done or materials bought