New kitchen - via mortgage or loan?

HurdyGurdy

We are a married couple aged 61 and 60, in good health and with secure jobs. Our mortgage will be paid off in one year's time. We are in the fortunate position of not needing to take a payment break during Covid. 
We want to have some work done to the house, including knocking two rooms into one and making them into a large kitchen. 
What would be the best way to finance this? Via a loan from a bank? or to do something with our current mortgage - extending it or replacing it? I am anticipating the cost to be in the region of £40,000. 
Not really interested in equity release
Is this an easy question to answer (roughly) or is it something with too many variables? 

dimbo61

Don't think you will get a £40,000 personal loan so maybe you could take out a new mortgage for the £40,000 plus the current mortgage balance depending on ERC,s 
Consider an offset mortgage so you can keep the " Kitchen funds in the offset account " untill you need to pay for the works.
Have you had quotes for the work ?
You should be able to get a mortgage till your 70 or 75 but if possible pay if off ASAP before you retire.
This depends on retirement income ! 

MWT

Check your mortgage options first, if you can pass the affordability criteria that should be your best option.

Failing that, don't dismiss the equity release products without looking into it further as these days it is easy to get the option to repay up to 10% per year and to get fixed ERC so they don't have to result in ever increasing rolled-up interest. ... but equity release would require the current mortgage to be fully repaid. 

HurdyGurdy

dimbo61 said:

Don't think you will get a £40,000 personal loan so maybe you could take out a new mortgage for the £40,000 plus the current mortgage balance depending on ERC,s 
Consider an offset mortgage so you can keep the " Kitchen funds in the offset account " untill you need to pay for the works.
Have you had quotes for the work ?
You should be able to get a mortgage till your 70 or 75 but if possible pay if off ASAP before you retire.
This depends on retirement income ! 

We had plans drawn up a couple of years ago, to have the two rooms knocked into one and then have a small extension built to square the room off, and got three quotes. They came in at about £30,000, not including the actual kitchen, tiling etc. That was considerably more than we had naively anticipated, so didn't go ahead with it.

Our plans now are not to have the extension bit done, just to have the room L shaped, so I'm hoping that the reduced building cost can go towards the kitchen itself. 

Thank you for the suggestion of offset mortgage. Will look into that now 

HurdyGurdy

MWT said:

Check your mortgage options first, if you can pass the affordability criteria that should be your best option.

Failing that, don't dismiss the equity release products without looking into it further as these days it is easy to get the option to repay up to 10% per year and to get fixed ERC so they don't have to result in ever increasing rolled-up interest. ... but equity release would require the current mortgage to be fully repaid. 

Thank you. We will look further into the Equity Release then. I've heard some horror stories about them, so thought it best to steer clear.