Extension - remortgage or savings

kittenkicks

Hi all, wonder if you have any advice. My husband and I are planning on getting a  extension on our 2 bed house, turning it into a 3-bed. It will be a two-storey extension that may cost in the region of £60,000. We have that money currently invested in Vanguard index funds, but we're struggling to work out what the best option would be.

1) Withdraw the money from Vanguard and pay for the extension in cash – The Vanguard index funds make around 10% a year, but there has been the odd year where it's nothing more than 1%, or even a slight loss, so it's not a certain return.

2) Remortgage at a rate of around 1.8% interest and continue to pay double our mortgage minimum payment (approx £1100) a month – We have already paid off nearly 50% of our mortgage, around £80k left to pay... house was bought at 150k, and is currently worth around 180k).

3) A bit of both... 50% of the cash from Vanguard, and 50% from a remortgage.

4) Or a fourth option we haven't thought of yet?

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Thanks in advance!

K_S

@kittenkicks It boils down to personal attitude. Personally, with my broker hat off, I would go for option 2 and leave the ISA untouched.

kittenkicks

Thanks for the advice. I think we might have to just bite the bullet and make a choice one way or another 

getmore4less

Tax free wrappers offer a lifetime tax free.
If you are going to able to max out the allowance in the future keeping the wrapper full has merit as does pension.

If you borrow the money you can change your mind later cash in and pay it off.

Cashing in an ISA is a one way move no going back.