Borrowing more in current climate?

MFWannabe

IvyFlood said:

MFWannabe said:

Can I ask why you’d want to increase mortgage by 10k rather than just get a personal loan? 

Loan wouldn’t be secured on property and you wouldn’t have to extend the mortgage term by so much 

In all honesty we just hadn't considered it. Wasn't sure if you could have a personal loan on top of a mortgage? But now you mentioned it I did a bit of research and it may well be an avenue we go down.

If you can obtain a loan it would be a better route to take than putting on mortgage, with your income you should be able to obtain a loan 

BikingBud

IvyFlood said:

MattMattMattUK said:

IvyFlood said:

How likely is it we'll be able to borrow more when we come to remortgage in the current climate?

Current 5yf ends in September and we'll owe about 135K with 18 years remaining. We have a LTV of 56%. We'd like to borrow 10k more to do some renovations which we'll have to extend the term, possibly to 30 years. I'm hoping we'll be able to reduce the term in the future depending on what happens.

Our monthly repayment is £823 which to be honest we'd probably have to up the term anyway to keep it at that even if we didn't have the intention to borrow more. Otherwise we'd have no savings. I'm just not sure what our chances are of borrowing more or if we even should!

EDIT: We have a joint income of 52.7K and we are 36 & 39 with no debt other than the mortgage

The biggest factor here might be that you are talking about only borrowing an additional £10k, but you are going to nearly double the term, that would indicate something is going wrong financially.
Between the two of you you are taking home £3,656 pcm (less any pension contributions).
£135k over 18 years at 4.5% would mean repayments of £913 pcm
£145k over 18 years at 4.5% would mean repayments of £981 pcm
£145k over 30 years at 4.5% would mean repayments of £731 pcm, however you would pay an additional £52,612 in interest over the term. 
Lenders are slightly sceptical of additional borrowing at the moment, that, combined with you wanting to increase the term significantly might be a warning sign to them in itself, they may lend you the additional and extend the term, but in my opinion it would be far from advisable for you to do both, borrow the extra £10k if you can, but do not extend the term.

Thank you for this. For some reason I had it in my head that in order to borrow more we would have to extend the term in order for the monthly repayment to be 'manageable', however £981 doesn't seem so bad. Ok we'd be saving less but I'm sure that's the same across the board. I'm glad I asked the question.

£68*12*18* = £14688 means you pay ~ 50% in interest over the period

Whereas for £3656 -£186 leaving ~£3470 still to live on gives you: