Evening

joeglas

Hi
We need to borrow around 25k for home improvements.
We are in a good position that we can do it is as additional borrowing or on a loan about same apr
What would be best a loan on additional borrowing on our mortgage
Thanks

CliveOfIndia

Based purely on the information you've given, a personal loan would be best.  That way your home is not at risk if you find yourself unable to repay the loan for any reason.

I'm a little surprised that the APRs are the same for both - usually a mortgage has a lower APR simply due to the fact that it's secured, hence less of a risk to the lender than an secured loan.

But if the APRs are the same then the personal loan rather than the mortgage is a no-brainer.

On a more general note, the other thing to watch with mortgages is how much you pay overall.  Even if the APR is significantly lower than a personal loan, if you end up repaying it over 20 years or whatever then you'll usually end up paying more overall.  But it can be a good option if you can repay the additional borrowing over a shorter time period than your main mortgage.