Remortgage - valuation of property

maurice28

I suspect this is a simple query, but having not gone through the process before it would be great if anyone could clarify!

My wife and I are looking to have an extension built on our current house. We have lived there since October 2010 and, at time of writing, have about £62k left to pay on the mortgage.

We'd potentially be looking to remortgage to a new lender. We're currently with Britannia, but I was looking at Natwest - remortgaging to them and borrowing an extra £40k, to fund the extension.

Their online calculator shows that's possible, and that repayments would be about what we pay now (we currently overpay each month) over a period of 16 years (this brings us to the same end date as we would have had with our current mortgage, before we started overpaying).

I just wondered about the value of the house used for calculating the equity and repayments in a remortgage. The online Natwest form says use the house value from the last valuation. For us, that is the purchase price from October 2010 (£118k). However, since then we have added improvements (double glazing, off road parking, a patio in the back garden) and similar properties on our road have gone for around the £130-140k mark.

As part of the application, would Natwest revalue the house and then use that as part of the repayments and lending amount decision? So if it was worth £130k now, for example, we could in fact borrow £45k over the same time frame with the same monthly payments, as our LTV ratio would be even better?

Or will the application always be based on that original purchase price?

Hope that makes sense, any advice greatly received!