Mortgage increase to fund home improvement

easylife_2

Hello,

Would really appreciate any advice.

We are currently looking to have a new extension on our house costing approx. 50k. My understanding was I could add the balance onto my fixed rate mortgage with NatWest as I've paid over half my mortgage off. However when I spoke to them on the phone I was told this additional borrowing would not be added to my existing mortgage on the 2% rate I have but would be a new mortgage on top at 3.7%. This was a bit of a shock as it'll mean we repay a lot more over the 20 years remaining. So my questions are is this normal when looking to remortgage for this kind of thing? Is there a better way to raise the money? I have a good credit rating but not enough in savings to do it without borrowing the majority.

Thanks in advance

amnblog

A 'shock' it may be, but it is 'normal'.

Most lenders offer further advances (as they call them) at a single higher rate.

You have there options.

1. Take the Nat West deal

2. Remortgage the lot

3. Take the extra £50K with an alternate Lender

A broker can help you decide which is the best route for you.

enthusiasticsaver

If your mortgage is on a fixed or discounted rate then yes it is normal. Further advances are treated as a new mortgage. You can remortgage with another lender but if you are tied in with your current lender there would be a penalty. You can also take a secured loan with another lender.

As suggested above see a broker to get the best deal or shop around yourself.

easylife_2

Thanks for the advice ^^

getmore4less

easylife wrote: »

it'll mean we repay a lot more over the 20 years remaining

it will not be the full 20 years, just till you next switch.


What will £50k extra do to the LTV.