extend existing mortgage or get loan?

marcm54

I currently have 7 years left on my main (25 year) mortgage (rate about 2.79%) and have just purchased a BTL property. I am planning major renovation work on the new property (spending around £75K) which will bring the place up to a high standard, increase its market value and increase the rental yield (e.g 5 bedrooms instead of 3). Some of the renovation work will be financed from savings (about £35K) and the will need to borrow the remainder. Is it smarter to extend my existing mortgage to generate the funds (if so should I tell my current lender that the money will be used on improvements to my main home) or should I take out a separate loan arrangement? Grateful for any advice....

foxy-stoat

You may struggle to get 40K unsecured so speak to your current lender and be truthful.

JimmyTheWig

marcm54 wrote: »

if so should I tell my current lender that the money will be used on improvements to my main home

No, don't lie during a mortgage application. That would be fraud.

Ebe_Scrooge

As above, you don't want to be lying to your lender about the reason for the extension, you'd end up in all sorts of trouble if they found out. Your best bet would be a mortgage / further advance against the BTL property. If you bought it for cash and don't currently have a mortgage on it, then a new mortgage doesn't have to be over 25 years - you could do it over 5 or 10 years or whatever you can afford.

JimmyTheWig

If you're not currently tied in to your residential mortgage it might be best to remortgage to a different lender and add the amount that you need to the loan at that point. I've heard that less questions are asked doing it that way.

marcm54

Thanks all for your useful input, much appreciated :T