Home improvements: remortgage, use savings or clawback?

Wsb5tails

We're planning large house refurbishments estimated at £80k. We have all the savings spread around all the high paying current accounts in the name of the non tax payer between us and 1.75% Isas.
We have an Interest only flexible mortgage with just £150 left to pay, 8 years to run and at 4.99%. The original Endowment is still running as a savings plan too.

Rather than use all our savings I thought about taking back some of the money we have overpayed to our Mortgage (as per t&c's) and trying to get a nice low rate but the arrangement fees all seem to outweigh the benefits.

OH is only just a higher rate tax payer.

What do you clever folk think?
What's the best way to fund our project?

SandC

There will be more knowledgeable people around soon to help I'm sure but...... what a lovely dilemma to have! :-)

Best of luck with your refurb!

Wsb5tails

I just have Martins advice ringing in my ears about paying off Mortgages at higher rates before saving but all rates are so low now. We're only in this position as a result of several redundancies, if it weren't for them we may well have moved to the house of our dreams a few years ago.

ViolaLass

Why borrow from the mortgage when its rate is higher than your savings?

Wsb5tails

Because there are mortgage rates available at less than 2% currently while some of our savings are getting 5, 4 or 3%. I didn't mean to take the loan at the current SVR. Apologies if that was unclear.