Borrowing more on mortgage for a car & home renovations

debtor35351

For the last 10 years or so, I've been trapped in the PCP cycle and been biding my time with used car prices, putting up with a car that I frankly don't want to keep. But it's not cost me a lot overall. It's now in a small amount of equity and I'm getting rid of it soon.

Car

I want to buy a particular vehicle which is about £25k, private sale. I'm not interested in "just getting from A to B" and like interesting cars.

I could spend less, but you only live once (could also spend A LOT more!!!), and I've already taken most of the fun out of my life.

Lifestyle

I have quit smoking, quit drinking and quit spending money on other hobbies. I'm otherwise debt free and have a perfect score on my credit report somehow (999 with Experian, 991 with Clearscore). 

Why?

It's work sleep eat repeat and I miss having being able to go out for a drive, plus I'd like to go on a few roadtrips in the next few years. I'm not doing that in a 140bhp estate.

Mortgage

The mortgage is currently at 42% LTV, the extra borrowing would take it to just over 50%.

Mortgage rate was higher than I would have liked due to missing out on several buying opportunities and only finding the right property after the rates went mental. I'm at 5.6% for 3 years (2 years to go...). Lucky I had quite a bit of equity from my old property.

Loans

I can't find a personal loan or other finance option at anything close to the rate I can get extra money from on my mortgage - seems to be 4 to 5% depending on fix term. I will need about £40k total. 

Over payments

The part for house renovations will be paid off over a longer period but I'd aim to pay off the car part within 6-7 years by making over payments. In that time it's likely I will change car a couple of times and I'm happy to eat the cost of that side of it.

If I financed this any other way I'd either burn up all my savings, or pay a huge interest rate on a loan, costing me more in the long run

I am probably asking in the wrong place because I assume a lot of people here are happy to drive around in something that cost £1500 and run it into the ground! That's not me...

Thoughts?

BarelySentientAI

Thoughts?

You've already decided and you don't need our approval, especially as we clearly don't understand your lifestyle, motivations, or choice of motor vehicle.

Traditional advice would be not to use your house as security for other things, or convert non-secured to secured debts, but you have dismissed that possibility.

Tucosalamanca

In the last ten years, you haven't managed to save the £40k that you now require.

What's changed now, or is going to change in the future?

If you want a 'better' lifestyle, improving your income or saving is the way to go.
Borrowing more is unlikely to lead to the best outcomes in the long run...

bluelad1927

Good luck spending 25k on a private sale car purchase.  In essence the car may be worth it but the risk is greatly increased especially if its an 'interesting' car

debtor35351

Tucosalamanca said:

In the last ten years, you haven't managed to save the £40k that you now require.

What's changed now, or is going to change in the future?

If you want a 'better' lifestyle, improving your income or saving is the way to go.
Borrowing more is unlikely to lead to the best outcomes in the long run...

I have been busy reducing my mortgage and increasing my income. That's why my LTV is so good. 

What's changed is that I've put up with my current runabout for long enough and am sick of it. Used car prices are finally becoming more reasonable and I want to be able to do some roadtrips over the summer. I've been extremely cautious with extra borrowing, other than my mortgage of course, and feel like I'm just working and sleeping at the moment.

Having spent some time thinking and doing sums this evening, I have decided against the mortgage for the car portion and will get a loan, but the house renovations can be added to the mortgage.

bluelad1927 said:

Good luck spending 25k on a private sale car purchase.  In essence the car may be worth it but the risk is greatly increased especially if its an 'interesting' car

I think there is a risk buying a car from anywhere and despite common perception, you aren't really that much better off buying from a dealer either, even with better consumer rights.

enthusiasticsaver

How much spare money do you have each month to save towards the car?  I would use savings rather than overpay the mortgage.

Bigphil1474

Why not take your old car on one last burnout on your road trip, then change it then. Depends on your idea of a road trip, but an estate might be handy anyway. 
Buying a car from a dealer will give you more rights than a private sale, and isn't necessarily that much more expensive. Despite the rumours, there are some decent second hand car sales places out there. I've bought from 2 in the past 15 years and both were really good deals, good service and the cars were spot on. One lasted about 6 years before I needed to change it, and the current one I've had for 4 years and no issues. 
Just another option - if you don't buy a newer car and don't get the house renovated, could you afford to work less and have more leisure time?

Phoenix72

debtor35351 said:

Tucosalamanca said:

In the last ten years, you haven't managed to save the £40k that you now require.

What's changed now, or is going to change in the future?

If you want a 'better' lifestyle, improving your income or saving is the way to go.
Borrowing more is unlikely to lead to the best outcomes in the long run...

I have been busy reducing my mortgage and increasing my income. That's why my LTV is so good. 

What's changed is that I've put up with my current runabout for long enough and am sick of it. Used car prices are finally becoming more reasonable and I want to be able to do some roadtrips over the summer. I've been extremely cautious with extra borrowing, other than my mortgage of course, and feel like I'm just working and sleeping at the moment.

Having spent some time thinking and doing sums this evening, I have decided against the mortgage for the car portion and will get a loan, but the house renovations can be added to the mortgage.

bluelad1927 said:

Good luck spending 25k on a private sale car purchase.  In essence the car may be worth it but the risk is greatly increased especially if its an 'interesting' car

I think there is a risk buying a car from anywhere and despite common perception, you aren't really that much better off buying from a dealer either, even with better consumer rights.

Going to disagree with you there. Plenty of evidence on Consumer Right Board/Motoring boards of people successfully rejecting cars under CRA or S75 where a deposit paid ona credit card. 

The problem is most people don't know what their rights actually are and get fobbed off by dealers.