House extension query

bargainhunter121

We were thinking of doing a double storey extension as the layout of our home isn’t great. We have a separate shower room and toilet, no room for a bath. Kitchen is tiny and also small bedroom. We are getting drawings done at the moment and then Coronavirus hit. It would take quite some time (if at all) for us to get our money back if we go ahead with the extension as it’s likely to cost around 65k just to make it a bit more liveable, not adding any bedrooms. It’s going to take around 5 months to build plus the time to get the paperwork sorted. We have a 3 month old baby which kind of spurred us to think about doing the work for him to have a bath etc. We currently have 11k left on our mortgage, due to finish next July. If we were to leave our current mortgage and remortgage with another lender the erc would be £340. Our current lender won’t allow us to add to our mortgage to pay for the extension and instead want us to apply for a self build loan (we require at least 35k- the rest will be savings) our house is currently worth around 235k. The loan will be paying interest only for the first 18months, then is consolidated with our mortgage (which will have finished by then..) has a product fee of 1795 and interest rate of 5%. 

We aren’t sure what our options are other than the self build loan, it seems an expensive option. Can we just remortgage requesting a higher amount (45k)? Or do we have to apply for self build loans?  Not sure which lenders provide such loans for comparison...

Also is now a bad time to consider such work? 

Thanks.