Remortgage. Extra money for improvements

superdon

We are thinking of adding maybe 5 or 6k to our remortgage when we do it to do a few improvements to the house.

We don't know exactly how much we need but not more than the 6k.

Basic question, but I am struggling to work it out in my head. If we took say an extra 6k and then only needed say 4k, then overpaid what was left (so the 2k). In that case we would only be losing out on the daily interest from drawing the mortgage until the day we overpaid. Is that correct?

Hope that makes sense!

I know ideally we would only take exactly what we need but that's not really possible and we want to make sure we have more than enough to do what we want.

Thanks

Foxy-Stoat_3

Have you checked on your lender's website to see if they have minimum amounts they would lend on a remortgage?

Try an unsecured loan, would work out much cheaper and easier.

superdon

Foxy-Stoat wrote: »

Have you checked on your lender's website to see if they have minimum amounts they would lend on a remortgage?

Try an unsecured loan, would work out much cheaper and easier.

Thanks. Should have explained. We are remortgaging to a new lender anyway as we are coming to the end of a fixed rate. So, adding a few grand isn't a problem (subject to valuation). So, I don't think it would be any easier or cheaper to go for a separate loan.


Like I say, the main question is how much we would lose out by taking more than we need and the overpaying it back. Would only be a matter of weeks, so I am thinking the actual cost would be minimal as it would just be the added interest of the extra money for that period of time?

Foxy-Stoat_3

superdon wrote: »

Like I say, the main question is how much we would lose out by taking more than we need and the overpaying it back. Would only be a matter of weeks, so I am thinking the actual cost would be minimal as it would just be the added interest of the extra money for that period of time?

Yes you would lose out, but only about a round of drinks if you borrowed £2K for a couple of months, subject to any overpayment charges, if any.

Mortgage rate divided by 365
Multiply by the number of days you have the extra
Multiply by £2000
Divided by 100

Or something like that.

Will roughly give you the interest you will pay on the extra £2K that you borrow over a certain number of days.

superdon

Foxy-Stoat wrote: »

Yes you would lose out, but only about a round of drinks if you borrowed £2K for a couple of months, subject to any overpayment charges, if any.

Mortgage rate divided by 365
Multiply by the number of days you have the extra
Multiply by £2000
Divided by 100

Or something like that.

Will roughly give you the interest you will pay on the extra £2K that you borrow over a certain number of days.

Excellent thanks. If that's right, it looks like 2k would cost about £11 over 60 days. That answers my question