How did you fund your extension?

Jonathan_Powell

I live in a 2 bedroom, mid-terraced house. House value is more than £300k with around £215k and 14 years left on the mortgage. 2 children; 4 year old boy and 1 year old girl.

The idea we have is to go into the loft where we have been told we could fit a bedroom with an ensuite. Cost would be around £40,000.

Our main issue is we both don't want to extend the mortgage term longer than it already is. My previous jobs haven't been stable and whilst the wife was on maternity last year, I lost my job which destroyed our savings and raises our debt considerably. 

Once the nursery fees are out of the way (which would be September 2024), assuming we have the same salary, we could save up for the loft conversion in 2 years and pay for it in cash. By then, the youngest would have been way too old to be waiting for her own room. 

Just looking for advice and to see how others he funded theirs... 

Rosa_Damascena

I'm considering robbing a bank  

Seriously, you have equity in your home now. I suggest you remortgage on a longer term at a preferential rate now for lower monthly costs, on an offset mortgage. The overpay as much as you can - even if it's an offset with a fluctuating balance - and you'll find it a lot less painless than you expect. 

Eta: what I man is I think you'll still end up paying it off in 14 years but with less psychological pressure to do so.

grumbler

Well, you either save or borrow. For borrowing mortgage is likely to be the cheapest option. If the mortgage allows overpayments, you can pay £40K back over 2 years instead of saving.

As simple as that.

casper_gutman

Most of the options have downsides. You could...

Save up - but then you don't get the extension for many years.

Borrow from relatives - only works if you have relatives with £40,000 spare lying around.

Borrow by extending your mortgage - but you'd prefer not to do it.

So, leaving aside robbery with violence you're basically left with borrowing some other way - but this is going to be more expensive than mortgage borrowing.

phoebe1989seb

Not suggesting this is in any way a good idea, but a relative of ours is funding a loft conversion from the proceeds of breeding dogs during the pandemic 😯

Two litters of pedigree puppies at £2k a pop have just about paid for the work!

We're funding our own extension from savings and doing most of the work ourselves (DH is skilled in that department, lol!) to save costs....

Rdwill

Ours was a 'nice to have' kitchen extension, so we saved until we had enough cash.

mug2007

We had an offset mortgage, before we started the build, the savings account was bigger than the mortgage, now it is nearly zero  .  Glad we did it, as it is a great achievement and we will enjoy it for many years as we gradually pay it off!