What mortgage??

durhamlandy

Hey all, long time lurker here.
Looking at buying a new property and need some mortgage advise.
Property is circa 325k and needs some updating. Would like to build a large extension to 2 sides of the property (rear and side) planning dependent. I have circa 150k capital / equity to put into the property. My current plan is to get a mortgage at 290k - 90% LTV, have the house revalued once work complete, hopefully brining the house to around 450k as others in the area.
Being a builder I can get the building work at cost, doing the labours myself (other than plumbing and electrical cert) so should get the works done for circa 60k.
I would also like to capitalise on the current low rates offered for longer term mortgages 2.39% on a 5 year fixed for example. Am I able to have the house revalued during the mortgage period, ie. 1 year into the plan thus dropping the LTV and pushing more capital into the property, overpayments - or shall i get a shorter mortgage? Or a variable rate mortgage for no fixed period until works complete? Wife then mentioned a offset mortgage... CONFUSED as which way will be best?
any help appreciated
thanks

middleclassbutpoor

Not an adviser but my understanding is that your 90% ltv will be what is used to get the mortgage to buy the property.

If you go into a special deal from day 1- i.e. a 5yr fixed then the LTV will not be an issues for the next 5 years. Whilst it may drop in reality, you have secured that deal for 5 years. To renogotiate the deal in those 5 years it is likely to cost you a redemption penalty - a fee to get out.

On that basis, you could look for deals with no early repayment fee and renegotiate a remortgage deal.

An offset mortgage is where you would secure your mortgage and you put your savings against it and you dont earn interest on this but you don't pay interest either. You will have an agreed amount you can borrow and it makes the drawdown of funds easier.

You probably should seek the views of an adviser as ultimately, what you can borrow/afford to repay all need to be taken into account and there may be other considerations you need to think about outside of just the rate etc.

ACG

As above, if you are in a 5 year fix, you would have to pay to get out of the deal within those 5 years.

Usually 5% of the balance year 1
4% year 2
3% year 3 and so on.