Building an extension - where to start and how to finance?!

Rosa_Damascena

Briony123 said:

Thank you everyone! We’re early 20’s and this is our first home so unfortunately don’t know much about all of these things, this website has definitely helped! Real shame they don’t teach you any of this stuff in school 🤯

The other thing you should be aware of is that it is harder to get a mortgage the older you get, so front-load it now if you can.

I got a shock at the ripe old age of 46 that I couldn't get a 25-year mortgage, and accepted that from that point forward I wouldn't get a mortgage again. (I know I could get shorter terms, but this would cost me more overall; I'd rather have a longer term knowing that I would be overpaying fast and the debt would be gone within a much shorter span than 25 years).

Sofee3

We are getting an extension done and are funding the majority by borrowing more on mortgage, we can borrow up to 85% LTV and rest is savings. 

DRP

I’m just about to borrow 60k more for our extension. Interest rates are cheap and 5 year fixes available*

*assuming you have the LTV

BaskB

Humm you didnt mention approx "how much" you'd be looking to borrow?

Now while re-mortgage might be a good option (interest rates are lowest they've ever been) the interest rates have a danger they could go up in a few years and quite significantly over the term (unless you religiously fix every time your rate runs out), remember failure to keep up could mean losing your home.

A loan on the other hand... could be taken over 3-10 years and at usually fixed interest rate which are also quite low lately (2.8% I think is one of the headline rates MSE has) and as an added bonus.... NOT secured to the property in event of job loss/circumstance changes etc

Of course as others mention the best way would be to save and pay in cash once you have it avaliable (no debt method) but realistically how many of us could do that. I guess that depends how urgently you need the extension? incoming child? Home office? or just nice to have the room... If its the latter, that could wait till you can save it up for example

onomatopoeia99

Rosa_Damascena said:

Briony123 said:

Thank you everyone! We’re early 20’s and this is our first home so unfortunately don’t know much about all of these things, this website has definitely helped! Real shame they don’t teach you any of this stuff in school 🤯

The other thing you should be aware of is that it is harder to get a mortgage the older you get, so front-load it now if you can.

I got a shock at the ripe old age of 46 that I couldn't get a 25-year mortgage, and accepted that from that point forward I wouldn't get a mortgage again. (I know I could get shorter terms, but this would cost me more overall; I'd rather have a longer term knowing that I would be overpaying fast and the debt would be gone within a much shorter span than 25 years).

Have to admit that at 52 the last thing I want to do is increase my debt or remaining term, though both the bank I have my current account with and my mortgage lender seem to be falling over themselves to offer me re-mortgages without me even asking  . 

I've saved hard over the last decade and a bit with the base rate being low and gone from a six figure debt to mortgage neutral with a year's worth of emergency fund, and want to keep it that way so will fund major household projects soley from savings.