Re-mortgaging - Requesting additional money but to release later

xxedrushxx

I would like to borrow some additional money for an extension during the remortgage process. However, the building work would not start until Jan 2023 at the earliest.

Probably a daft question, but are there any solutions that could allow me to get a remortgage now at this current interest rate with an agreement to get the additional money when it's needed, thus not paying interest on it until I have it? 

I'm currently on a variable so I could wait but worried about interest rate rises 

dimbo61

Have you looked at an Offset mortgage ?
You borrow the money to repay your current mortgage debt and the extra needed to pay for the extension.
The " extension" money is paid into the Offset account but saving you interest each month.
When you need money to pay for the work in stages you just withdraw £xxxx from your offset savings.
If you get any other money from bonuses, overtime, gifts etc you just save into the Offset.
If you see a bargain kitchen/bathroom or any other items that you will use in the extension you have the Cash to buy.

Thrugelmir

xxedrushxx said:

I'm currently on a variable so I could wait but worried about interest rate rises 

What SVR are you currently paying? 

K_S

xxedrushxx said:

I would like to borrow some additional money for an extension during the remortgage process. However, the building work would not start until Jan 2023 at the earliest.

Probably a daft question, but are there any solutions that could allow me to get a remortgage now at this current interest rate with an agreement to get the additional money when it's needed, thus not paying interest on it until I have it? 

I'm currently on a variable so I could wait but worried about interest rate rises 

@xxedrushxx The short answer is, it's unlikely. The longest I can think of is reserving a Nationwide product for 90 days (by which time the offer must be issued), followed by an offer valid for 6 months, so taking you to the end of the year or so. If that's still too early, just plonk it in the 1.5% Chase saver at that point.

But if you want something that is fully flexible that you can dip into as and when needed, then it'll have to be an offset product, with the caveat being that you're going to be paying a premium for that facility so it'll probably even out anyways.

xxedrushxx

dimbo61 said:

Have you looked at an Offset mortgage ?
You borrow the money to repay your current mortgage debt and the extra needed to pay for the extension.
The " extension" money is paid into the Offset account but saving you interest each month.
When you need money to pay for the work in stages you just withdraw £xxxx from your offset savings.
If you get any other money from bonuses, overtime, gifts etc you just save into the Offset.
If you see a bargain kitchen/bathroom or any other items that you will use in the extension you have the Cash to buy.

Thanks Dimbo, I wasnt aware that was how Offset worked. I just checked and I see that the Offset mortgages are a bit higher interest than fixed, so I guess that is the tradeoff. Something to consider 

Thrugelmir said:

xxedrushxx said:

I'm currently on a variable so I could wait but worried about interest rate rises 

What SVR are you currently paying? 

1.94%. Can it make a difference on approach I should take? 

K_S said:

xxedrushxx said:

I would like to borrow some additional money for an extension during the remortgage process. However, the building work would not start until Jan 2023 at the earliest.

Probably a daft question, but are there any solutions that could allow me to get a remortgage now at this current interest rate with an agreement to get the additional money when it's needed, thus not paying interest on it until I have it? 

I'm currently on a variable so I could wait but worried about interest rate rises 

@xxedrushxx The short answer is, it's unlikely. The longest I can think of is reserving a Nationwide product for 90 days (by which time the offer must be issued), followed by an offer valid for 6 months, so taking you to the end of the year or so. If that's still too early, just plonk it in the 1.5% Chase saver at that point.

But if you want something that is fully flexible that you can dip into as and when needed, then it'll have to be an offset product, with the caveat being that you're going to be paying a premium for that facility so it'll probably even out anyways.

Thanks KS

Quite interesting on the Nationwide product. I think I will give them a call next week. I had in mind building works to start early 2023, so as you said maybe putting the money in savings until I need it. Some good recommendations all - thanks 

K_S

@xxedrushxx If you're on an SVR of 1.94%, that's not bad at all given rates in the current market. To put that in context, the lowest Nationwide fixed rate remo available at present is 2.24% for a 60% LTV 2yr fix.