Remortgage for House Extension Advise Please?

Smitty_1983

Hi, I’m looking start start a house exension in the next couple of months and need to borrow £60k to fund it. My current status as follows:

Current mortgage £150k, current mortgage is 2.09% and has charges of £6k at the moment to leave early and term ends Nov 21.

House value is circa £380k so there should be no issue raising the funds but wondering what best method is? Is the best bet to remortgage with current provider but I’m not sure how that works, would it be separate mortgage with them? And worried it won’t be a great deal?

any advise much appreciated.

K_S

@smitty_1983 With an ERC of £6k, your cheapest option to borrow an extra 60k now is likely to be taking out a further advance / additional borrowing from your current lender. If you do that, you end up with 2 mortgage parts - the £150k one ending Nov21 and the £60k one ending at a different date.

If you can wait till November, then a remortgage (to another lender) with a capital raise for the extension comes into the picture.

Smitty_1983

@K_S many thanks for responding.
So if I took out a separate one for the £60k then I guess I’m free in November to shift the £150k to another provider in November for a better rate. Wondering how I would realign the amounts with one provider in the future as the term ends will always be out of sync won’t they?

K_S

Smitty_1983 said:

@K_S many thanks for responding.
So if I took out a separate one for the £60k then I guess I’m free in November to shift the £150k to another provider in November for a better rate. Wondering how I would realign the amounts with one provider in the future as the term ends will always be out of sync won’t they?

@smitty_1983 Unfortunately not, you'll be tied to the same lender for both parts.

To join up the parts (say in November), you'd have to pay the ERC (if any) on the smaller part.

Smitty_1983

K_S said:

Smitty_1983 said:

@K_S many thanks for responding.
So if I took out a separate one for the £60k then I guess I’m free in November to shift the £150k to another provider in November for a better rate. Wondering how I would realign the amounts with one provider in the future as the term ends will always be out of sync won’t they?

@smitty_1983 Unfortunately not, you'll be tied to the same lender for both parts.

To join up the parts (say in November), you'd have to pay the ERC (if any) on the smaller part.

@K_@K_S thanks, I think I’ll look at remortgaging for the extra £60k on the shortest term i can, then at the at the end of the year work out if it’s better paying the early redemption and moving it all to a better deal 

K_S

Smitty_1983 said:

K_S said:

Smitty_1983 said:

@K_S many thanks for responding.
So if I took out a separate one for the £60k then I guess I’m free in November to shift the £150k to another provider in November for a better rate. Wondering how I would realign the amounts with one provider in the future as the term ends will always be out of sync won’t they?

@smitty_1983 Unfortunately not, you'll be tied to the same lender for both parts.

To join up the parts (say in November), you'd have to pay the ERC (if any) on the smaller part.

@K_@K_S thanks, I think I’ll look at remortgaging for the extra £60k on the shortest term i can, then at the at the end of the year work out if it’s better paying the early redemption and moving it all to a better deal 

@smitty_1983 Sorry for being pedantic what you're looking for with the 60k is a further advance / additional borrowing from your current lender for the purpose of a home extension. A 'remortgage' is when you change providers. Good luck!

[Deleted User]

2nd charge lending could also work and then remortgage when the main loan comes up for renewal