Re-mortgaging to build extension

badboy13

Our house is currently worth about £180,000 and we have about £90,000 mortgage on it. We are looking at building a double storey extension, not had any quotes etc but guessing it will cost about £50,000.


If we were to remortgage to finance it, do we have to base it on current house value? Wouldn't house value go up then?

davidmcn

It'll be on the current value. The bank have no idea if or when you'll build the extension.

badboy13

So initially will have to take higher LTV mortgage say for 2 years then can remortgage again and should be lot lower LTV based on new value of house?

Thrugelmir

A lower LTV may well offer alternative options. Whether interest rates will have remained low two years later is of course an unknown factor.

foxy-stoat

You have to base it on current value - and best get your quotes for the building work + all professional fees and planning costs in writing before going to your lender.

xyz123

As said, it's on current value. Just a note that please keep in mind that if you spend £50k on house, doesn't mean it's value automatically will increase by £50k or more...