Remortgage for house extension

two8tone

Any help from someone who's been through the process of choosing to finance a build from equity in their home. Looking at current options and not getting anywhere with brokers and mortgage advisers, as future rates are guesswork.

Not in a position to go ahead with the build now so options considering for project early 2018.

Option1 Fix mortgage now at 2.59% 75% ltv for 5 years and take out 20-25k personal loan to top up 35k savings in two years time (personal loan would be short term 5-7 years)

Option2 Fix mortgage now at 1.94% and remortgage drawing on equity in 2 years (at risk of high new rate for increased mortgage debt)

Option3 Offset mortgage, add savings to pot and withdraw in 2yrs (at risk of LTV not being high enough?)

Doing the sums is tricky as rates could be anywhere in a couple years, though I can get a very competitive personal loan rate today but still higher than current mortgage fixes.

SimoneD

As you have found - brokers won't be able to help you until you have a more fixed idea of when you want to remortgage, but you can read this remortgage for home improvement guide in the meantime remortgages.com/news/remortgage-for-home-improvement.html .

It looks like the mortgage rate will not be going up for a little while - at least until middle of 2018 (but that is just a guess based on what I have read recently) so you could leave a fix a little while yet.

You may find it cheaper to have a short term personal loan if you plan on paying it back quickly rather than extending your home improvement repayments over a longer time with a remortgage. If you intend to repay both at same rate then remortgage is likely to be your cheaper option to get some equity out of your property for the extension.

dimbo61

You have only given half the story.
Should you fix if you have a £50K mortgage maybe
Should you fix if you have a £500K mortgage ?
I Love offset mortgages and we have had 3 in the last 10 years.
We build up savings while also overpaying