What length when extending ?

Paulpen

Our mortgage renewal is due in August and we are planning to start a hefty extension in a few months time which I expect will take until the end of the year as best before completion.

We have always done 5 year fixed mortgages in the past with the comfort of knowing the monthly payments needed and saving a lump sum up to use come remortgage time.

We did consider doing that this time and keeping it simple but we are also aware that we are now changing the vaule of the house considerably.

At what point of an extension can the property be revalued by the lender - is it when its watertight and structually sound ? or when the inspector has signed it off ? or maybe different lenders have different requirements ?

Currently we owe about £180k on a £280k property. We need no more additional borrowing for the extension and expect the new value to be £365k minimum when complete therefore changing the LTV from the regions of roughtly 64% to 49% ish so we dont want to be stuck in a 5 year fix if we can get onto a 3 year with a much better rate due tothe LTV if that makes sense ?

Hoenir

60% LTV is the threshold for the best rates. You are so close. Might as well take a 5 year fix now. 

Paulpen

So there would be no benefit to playing a short term game etc as there is no better deals to be had once we hit 60% ?

Hoenir

Once you hit 60% LTV.  Really a question of shopping around and doing the maths. Product fees having a significant impact on the true cost depending on how much is borrowed.