Overpay and re-borrow later or save now?

MissMegany

Hi folks,
My husband and I have 3 more years on a fixed-rate mortgage that we've been overpaying before we remortgage, and were thinking of borrowing more at that time to do up our kitchen/bathroom. We currently owe £136k on a £200k-ish value house (valued at £186k when we bought it).

We've been overpaying by £500/month (limit allowed without changing the term) but could pay more. We're aware that interest rates may well go up when we need to remortgage.

We were thinking of getting the kitchen/bathroom redone, which may involve an extension. I realise that's anywhere between £10-£50k.

Should we:

a.) Up our overpayments to our limit (with an emergency bufffer), and then in 3 years ask to borrow more?

b) Up our overpayments to our limit, and then get a separate loan for the works.

c) Carry on overpaying, but a bit less, in order to save about half, then ask the bank to extend our mortgage by the remaining half?

d) Work out how much we need to save per month to achieve the total we need by a certain time, so that we can pay for the works without needing to borrow any extra money. Obviously this will mean not overpaying the mortgage, and it still may mean a small loan if it's more than we expect (isn't it always?).

e) Get a loan now, and just get a nice new kitchen/bathroom sooner, and factor loan repayments into what we can afford to overpay.

Any thoughts gratefully received! I realise that no one knows what the market is going to do in 3 years time, but input would be great!

Thanks!
Megan

Blackbeard_of_Perranporth

Dont borrow more next year, save your £500 a month now for the kitchen. This will ultimately save you money in the long term, as you will not have to release funds next year..

12 months will get you £6,000. If you borrowed next year, it will cost £6,000 on your mortgage plus transfer and solicitors fees. If your kitchen is more than £6,000, I am sure a couple more months wont hurt.

Thrugelmir

Continue to overpay while actually deciding what you want to do and obtaining proper estimates of the costs involved. If you wish to borrow £50k plus. You haven't currently got any leeway.

juniordoc

What rate are you paying on your mortgage now? Could you match or beat the interest rate in savings/high interest current accounts?
As above you need more clarity on how much you need to spend before you can know what the best course of action is.