Resend my activation email : Register : Log in 
BCF: Bike Chat Forums


Borrowing to extend house

Reply to topic
Bike Chat Forums Index -> Dear Auntie BCF... Goto page 1, 2  Next
View previous topic : View next topic  
Author Message

janner_10
World Chat Champion



Joined: 26 Sep 2011
Karma :

PostPosted: 05:20 - 16 May 2017    Post subject: Borrowing to extend house Reply with quote

We have simply out grown our house. Got a budget of £25000 to extend, which will net us a whole house extension at the rear to gain a dining room / play room and a single story first floor to gain a bedroom.

Home improvement loans over 5 years coming in at a little over 3% interest.

Is this the best way to go?

Re-mortgaging seems a bit daft as we will be paying the interest over the next 18 years (I don't want to reduce our term)

To me the short sharp shock of a 5 year loan seems to be the cheapest way. Any way you can balance transfer that to pay off with no interest?

Any thoughts?
____________________
Yamaha FZS600 (Now gone to heaven) > CBR600F4i (SOLD) > '99 YZF-R1
 Back to top
View user's profile Send private message Send e-mail You must be logged in to rate posts

arry
Super Spammer



Joined: 03 Jan 2009
Karma :

PostPosted: 06:23 - 16 May 2017    Post subject: Reply with quote

It's probably the cheapest the way you're suggesting but you know you can overpay your mortgage, right? Usually up to 10% of the value outstanding every year.

If you haven't remortgaged in a while I'd look at your current options before committing to the loan - might be a great deal out there.
 Back to top
View user's profile Send private message Send e-mail You must be logged in to rate posts

grr666
Super Spammer



Joined: 16 Jun 2014
Karma :

PostPosted: 07:45 - 16 May 2017    Post subject: Reply with quote

That seems a little bit cheap to me. Is that a proper quote or a shot in the dark on the price.
I've had quotes for a single storey wrap around for my place circa 40k and my house isn't anything special.
I've got builders booked to make me an 4 metre square outbuilding in August and that's coming in at 15k.
____________________
Currently enjoying products from Ford, Mazda and Yamaha
Ste wrote: Avatars are fine, it's signatures that need turning off. Thumbs Up
 Back to top
View user's profile Send private message You must be logged in to rate posts

arry
Super Spammer



Joined: 03 Jan 2009
Karma :

PostPosted: 07:51 - 16 May 2017    Post subject: Reply with quote

grr666 wrote:
That seems a little bit cheap to me. Is that a proper quote or a shot in the dark on the price.
I've had quotes for a single storey wrap around for my place circa 40k and my house isn't anything special.
I've got builders booked to make me an 4 metre square outbuilding in August and that's coming in at 15k.


Agree with that, too. Our side return extension single storey was looking to be a good 35-40k.
 Back to top
View user's profile Send private message Send e-mail You must be logged in to rate posts

Rogerborg
nimbA



Joined: 26 Oct 2010
Karma :

PostPosted: 08:36 - 16 May 2017    Post subject: Re: Borrowing to extend house Reply with quote

janner_10 wrote:
]Got a budget of £25000 to extend, which will net us a whole house extension at the rear to gain a dining room / play room and a single story first floor to gain a bedroom.

And your drive tarmacced? They can do you an extension cheap, they've got bricks left over from a job round the corner, so they have.

Aaaanyway, +1 to re-mortgage. Your loan is going to run you £450 a month, give or take. Bag a better deal on your existing mortgage and you might get it almost 'free' in terms of monthly repayments..

But +2 to over-paying if you possibly can. If you can afford £450 a month extra, then dump that into your mortgage. "How many sleeps until owner outright?" is a pretty good feeling.
____________________
Biking is 1/20th as dangerous as horse riding.
GONE: HN125-8, LF-250B, GPz 305, GPZ 500S, Burgman 400 // RIDING: F650GS (800 twin), Royal Enfield Bullet Electra 500 AVL, Ninja 250R because racebike
 Back to top
View user's profile Send private message You must be logged in to rate posts

iooi
Super Spammer



Joined: 14 Jan 2007
Karma :

PostPosted: 08:47 - 16 May 2017    Post subject: Re: Borrowing to extend house Reply with quote

janner_10 wrote:
We have simply out grown our house. Got a budget of £25000 to extend, which will net us a whole house extension at the rear to gain a dining room / play room and a single story first floor to gain a bedroom.


Is that what you have been quoted, or what you want to spend?

janner_10 wrote:

Home improvement loans over 5 years coming in at a little over 3% interest.


Are you sure you will get that rate? As well as can you afford a £400 to £500 hit a month.


janner_10 wrote:

Re-mortgaging seems a bit daft as we will be paying the interest over the next 18 years (I don't want to reduce our term)


You do not have to increase the term. You can still leave it at 18 years. Or take 25 and over pay by the difference to save £££.
Might even workout a lot cheaper.

janner_10 wrote:

To me the short sharp shock of a 5 year loan seems to be the cheapest way. Any way you can balance transfer that to pay off with no interest?


You have to really drop lucky and have a massive amount of available funds to get anything like that on a balance transfer..
Even on a balance transfer you are looking at a 3% fee (might get a bit less)
____________________
Just because my bike was A DIVVY, does not mean i am......
 Back to top
View user's profile Send private message You must be logged in to rate posts

angryjonny
World Chat Champion



Joined: 01 Sep 2006
Karma :

PostPosted: 10:12 - 16 May 2017    Post subject: Reply with quote

We were recently quoted >30k for a nice but not particularly fancy conservatory.

25k for a 2-storey extension seems suspiciously cheap.

£100-£150 per square foot, depending on finish, is a base estimate for extensions. Depends to some extent on location. I guess 25k is at the bottom end of that if you're looking for 100-120sqft per floor.

janner_10 wrote:
and a single story first floor

Is that cantilevered somehow, or are you built into a hillside?
 Back to top
View user's profile Send private message You must be logged in to rate posts

groovylee
World Chat Champion



Joined: 20 Nov 2011
Karma :

PostPosted: 11:43 - 16 May 2017    Post subject: Reply with quote

my last extension cost me £1000/sqm and that was a good rate, so i would echo the comments above.

I looked at a loan to do it, but in the end i just remortgaged, as the repayments would have left me stretched otherwise.

Lee
____________________
Past - 1988 honda revere 600, 1996 kawasaki gpz500s, 1999 Yamaha R6

Current - 2002 Aprilia RSV1000R & 1999 Kawasaki ZX6R


Last edited by groovylee on 13:06 - 16 May 2017; edited 1 time in total
 Back to top
View user's profile Send private message Send e-mail You must be logged in to rate posts

Alpineandy
World Chat Champion



Joined: 18 Mar 2015
Karma :

PostPosted: 11:44 - 16 May 2017    Post subject: Reply with quote

£25k does seem very very cheap.

I'd go for the re-mortgage as well.
As long as you're paying something to them every month they don't get as arsey as loan companies if you can't pay the full payment.

On a side note, you should always try to overpay your mortgage if possible, as it makes life so much easier if you ever get into the situation where you can't pay (or can't pay the full amount), and it's cheaper in the long run. Life will throw you these curve balls occasionally...

If you ever have a bit of spare cash in the account then you can pay some mortgage off rather than leave it there and wait for the 'We really need a new kitchen' line from the other half!

All IMO!
____________________
The above comment isn't necessarily the truth and anyone that says it is, is only correct if it's the truth or they're bigger than me.
 Back to top
View user's profile Send private message You must be logged in to rate posts

angryjonny
World Chat Champion



Joined: 01 Sep 2006
Karma :

PostPosted: 11:47 - 16 May 2017    Post subject: Reply with quote

groovylee wrote:
my last extension cost me £100/sqm and that was a good rate, so i would echo the comments above.

That's an astonishing rate. I'd expect to pay >£1000/sqm.
 Back to top
View user's profile Send private message You must be logged in to rate posts

BTTD
World Chat Champion



Joined: 22 Nov 2012
Karma :

PostPosted: 11:56 - 16 May 2017    Post subject: Reply with quote

Roughly 5 years ago I bought a freehold single garage just down the road from my house. £15k. Phoned up my mortgage holders and asked if I could increase the mortgage (had well over £100k equity, was overpaying at the time).
They quoted me 8% on the additional loan + arrangement fees of £500. I asked them if they were joking.
In the end I took an unsecured personal 10yr loan at a much better rate and no set up fee.
 Back to top
View user's profile Send private message You must be logged in to rate posts

Alpineandy
World Chat Champion



Joined: 18 Mar 2015
Karma :

PostPosted: 12:29 - 16 May 2017    Post subject: Reply with quote

jnw010 wrote:
Roughly 5 years ago I bought a freehold single garage just down the road from my house. £15k. Phoned up my mortgage holders and asked if I could increase the mortgage (had well over £100k equity, was overpaying at the time).
They quoted me 8% on the additional loan + arrangement fees of £500. I asked them if they were joking.
In the end I took an unsecured personal 10yr loan at a much better rate and no set up fee.

That does seem extremely odd.
I'd guess that as it wasn't at the same address they were treating it as a separate loan, whereas a house extension should be at the same terms as the main house... shouldn't it? (it was for me).
____________________
The above comment isn't necessarily the truth and anyone that says it is, is only correct if it's the truth or they're bigger than me.
 Back to top
View user's profile Send private message You must be logged in to rate posts

arry
Super Spammer



Joined: 03 Jan 2009
Karma :

PostPosted: 12:40 - 16 May 2017    Post subject: Reply with quote

jnw010 wrote:
Roughly 5 years ago I bought a freehold single garage just down the road from my house. £15k. Phoned up my mortgage holders and asked if I could increase the mortgage (had well over £100k equity, was overpaying at the time).
They quoted me 8% on the additional loan + arrangement fees of £500. I asked them if they were joking.
In the end I took an unsecured personal 10yr loan at a much better rate and no set up fee.


They would do that as they want you to buy a new product so that you end up having to buy out the fixed term on the old and pay the new product fee on the new.

Just remortgaging though, from only 4 years since I last did it, has saved me a huge amount - there's some stunning rates out there at the moment.
 Back to top
View user's profile Send private message Send e-mail You must be logged in to rate posts

groovylee
World Chat Champion



Joined: 20 Nov 2011
Karma :

PostPosted: 13:07 - 16 May 2017    Post subject: Reply with quote

angryjonny wrote:
groovylee wrote:
my last extension cost me £100/sqm and that was a good rate, so i would echo the comments above.

That's an astonishing rate. I'd expect to pay >£1000/sqm.


well spotted mate Laughing

edited to £1000/sqm

Thumbs Up
____________________
Past - 1988 honda revere 600, 1996 kawasaki gpz500s, 1999 Yamaha R6

Current - 2002 Aprilia RSV1000R & 1999 Kawasaki ZX6R
 Back to top
View user's profile Send private message Send e-mail You must be logged in to rate posts

BTTD
World Chat Champion



Joined: 22 Nov 2012
Karma :

PostPosted: 13:34 - 16 May 2017    Post subject: Reply with quote

arry wrote:
They would do that as they want you to buy a new product so that you end up having to buy out the fixed term on the old and pay the new product fee on the new.

Just remortgaging though, from only 4 years since I last did it, has saved me a huge amount - there's some stunning rates out there at the moment.


My mortgage isn't a fixed rate product, and I was only looking to add onto it, it's a simple variable rate mortgage with no redemption fees or penalties. I took it out over 10 years ago at base rate + %. I can't remember exactly what the % was, but I recall it being very low as at the time everyone thought rates were going up and people were transferring into fixed rate deals.

I have no idea why they wouldn't give me a better rate with my house as security than Tesco's would without any. Never missed a payment, loads of equity in the property, good credit score - I went through it all with them on the phone and the response was, "Well that's the rate we're offering". Neutral

Their attitude rather annoyed me so I did look into remortgaging, but couldn't find any better deals so stayed with much cheapness + personal loan.
 Back to top
View user's profile Send private message You must be logged in to rate posts

akaDAVE
World Chat Champion



Joined: 01 Sep 2005
Karma :

PostPosted: 15:07 - 16 May 2017    Post subject: Reply with quote

I did some renovation on our house last year with some building work and it came in around 20k.
We had a fixed rate mortgage with 2 years left and an 'exit fee' but the comparably lower rates on offer since we fixed meant we would recoup that fee over the course of the next 3 years + borrow the extra 20 with reduced monthly repayments. Helped by higher house valuation.
Added to that was the fact we had a baby on the way so time was also a factor.

The point being, get a financial adviser / mortgage broker run through the figures. it can be a head-scratcher and the right option might not be immediately obvious.
____________________
GSXR600
 Back to top
View user's profile Send private message Send e-mail You must be logged in to rate posts

janner_10
World Chat Champion



Joined: 26 Sep 2011
Karma :

PostPosted: 19:19 - 16 May 2017    Post subject: Reply with quote

Cheers for the replies so far.

We are 1 year into a 5 year fixed term on the mortgage @ 2.89% with Santander, so to re-mortgage would incur a 4% penalty, on an outstanding balance of £110,000 - so that's £4.4k right off the bat.

We currently have a house wide conservatory at the rear , which is not really practical and wasn't that well done by the previous owners.

Our £25k, will get us something like this, which would suit us fine:

https://www.darrenhendry.co.uk/wp-content/uploads/2016/02/double-storey-rear-paygrove-lane-longlevens.jpg (aside the crappy plastic roof)

The quoter, is a well respected local builder, not some chancer, comes with good local recommendations (although always an element of risk, I would imagine) We are based in Tewkesbury, Gloucestershire, so to the guys in the South East, this must appear very cheap. The average seems about £900 per s/m around here.

He will take away and sell the existing conservatory and offset what he gets to subsidise the other costs.

My Wife's Dad is over from Poland during the summer, so he is being rented out as labour, which shaved off another £1k

I really can't see past a better deal than a personal loan, which I can get at 3.3% over 5 years, at pretty much the same repayments as Roger mentioned. I currently stand all bills / mortgage etc myself whilst the missus gets the shopping / food, so £230 each isn't really an issue at all.
____________________
Yamaha FZS600 (Now gone to heaven) > CBR600F4i (SOLD) > '99 YZF-R1
 Back to top
View user's profile Send private message Send e-mail You must be logged in to rate posts

Robby
Dirty Old Man



Joined: 16 May 2002
Karma :

PostPosted: 20:07 - 16 May 2017    Post subject: Reply with quote

When I last added something to the mortgage it was done as a sub-account, with a different term - so in effect a different mortgage. I could even have different deals/rates on my main mortgage and my sub-account extra bit.

So it is worth asking your mortgage company. The rate won't be much different, you'll end up paying about the same, but a mortgage can give you a lot more flexibility to overpay, or extend the term and reduce your monthly payments.
 Back to top
View user's profile Send private message You must be logged in to rate posts

janner_10
World Chat Champion



Joined: 26 Sep 2011
Karma :

PostPosted: 20:29 - 16 May 2017    Post subject: Reply with quote

Robby wrote:
When I last added something to the mortgage it was done as a sub-account, with a different term - so in effect a different mortgage. I could even have different deals/rates on my main mortgage and my sub-account extra bit.

So it is worth asking your mortgage company. The rate won't be much different, you'll end up paying about the same, but a mortgage can give you a lot more flexibility to overpay, or extend the term and reduce your monthly payments.


Actually, I didn't even think to ask my Santander about it - worth a call at least.
____________________
Yamaha FZS600 (Now gone to heaven) > CBR600F4i (SOLD) > '99 YZF-R1
 Back to top
View user's profile Send private message Send e-mail You must be logged in to rate posts

angryjonny
World Chat Champion



Joined: 01 Sep 2006
Karma :

PostPosted: 20:42 - 16 May 2017    Post subject: Reply with quote

Yeah I think a fixed term on your mortgage isn't necessarily an issue if you're going back for more. What they don't want is for you to settle it after 6 months so they earn nothing of note off the loan.

It was explained to us that moving (for example) was fine... it's clearing it or, more usually, switching to a different provider that they're trying to discourage.
 Back to top
View user's profile Send private message You must be logged in to rate posts

Gunge
Two Stroke Sniffer



Joined: 06 Nov 2012
Karma :

PostPosted: 22:09 - 16 May 2017    Post subject: Reply with quote

janner_10 wrote:
Actually, I didn't even think to ask my Santander about it - worth a call at least.


https://www.santander.co.uk/uk/mortgages/borrow-more-money

Do it. I have obtained additional lending from Santander three times over the last 8 years to fund various projects. As others have said - with the 10% overpay facility on fixed mortgages it gives you more flexibility than a 5 year loan if your needs change and you may be able to get a better rate than 3% depending on your circumstances - last one I had was 1.49% (tracker so I could pay it off whenever I wanted), while my main mortgage is fixed on 2.89%.
 Back to top
View user's profile Send private message You must be logged in to rate posts

Rogerborg
nimbA



Joined: 26 Oct 2010
Karma :

PostPosted: 22:42 - 16 May 2017    Post subject: Reply with quote

I'd question whether 10% annual overpayment is a good deal if you're intending to pay down significant amounts.

I'm on some Halifax Mug's Rate "Standard" mortgage but paid off a whopping sum last year and am currently dumping about 5% of the outstanding amount a month, which will only rise as a percentage as the principle diminishes. There's no limit to how fast I can pay it off.

I looked into re-mortgaging, but the multiple thousands in "arrangement" fees that you get bummed with for getting lower rates outweighed what I could save by just paying down sharpish.

tl;dr version - if you meet a Harley rider while out and about, ask them for financial advice.
____________________
Biking is 1/20th as dangerous as horse riding.
GONE: HN125-8, LF-250B, GPz 305, GPZ 500S, Burgman 400 // RIDING: F650GS (800 twin), Royal Enfield Bullet Electra 500 AVL, Ninja 250R because racebike
 Back to top
View user's profile Send private message You must be logged in to rate posts

dydey90
World Chat Champion



Joined: 01 Oct 2013
Karma :

PostPosted: 08:33 - 17 May 2017    Post subject: Reply with quote

Just had a quick look. The absolute cheapest rate is 3% from Yorkshire Bank and Clydesdale Bank, but the rates go up to 9.9% with Admiral (who I wasn't aware did finance).

If you have a mortgage and there's still a lot of time left for it to run, it'll hurt a lot less. If it's the full 25 years, then it's roughly £100 a month extra rather than £490.
____________________
This post is probably not serious and shouldn't be taken literally.
Past: CBR125,ER6f NINJA 650, ZZR600 Current: VFR750
 Back to top
View user's profile Send private message You must be logged in to rate posts

Rogerborg
nimbA



Joined: 26 Oct 2010
Karma :

PostPosted: 08:45 - 17 May 2017    Post subject: Reply with quote

dydey90 wrote:
If you have a mortgage and there's still a lot of time left for it to run, it'll hurt a lot less. If it's the full 25 years, then it's roughly £100 a month extra rather than £490.

And if you can afford £490 a month, dump the other £390 into the mortgage anyway.
____________________
Biking is 1/20th as dangerous as horse riding.
GONE: HN125-8, LF-250B, GPz 305, GPZ 500S, Burgman 400 // RIDING: F650GS (800 twin), Royal Enfield Bullet Electra 500 AVL, Ninja 250R because racebike
 Back to top
View user's profile Send private message You must be logged in to rate posts

Gunge
Two Stroke Sniffer



Joined: 06 Nov 2012
Karma :

PostPosted: 21:51 - 17 May 2017    Post subject: Reply with quote

Rogerborg wrote:
I'd question whether 10% annual overpayment is a good deal if you're intending to pay down significant amounts.


Depends. Last time I had additional borrowing I went for a tracker so I had complete freedom over repayments but the 10% applies to each mortgage chunk, so while you would only be able to pay down 50% of the additional borrowing over 5 years you can pay back 50% of the main mortgage too. You needn't have higher borrowing at the end of the 5 years, but you are right that it needs to be thought through a bit.
 Back to top
View user's profile Send private message You must be logged in to rate posts
Old Thread Alert!

The last post was made 6 years, 316 days ago. Instead of replying here, would creating a new thread be more useful?
  Display posts from previous:   
This page may contain affiliate links, which means we may earn a small commission if a visitor clicks through and makes a purchase. By clicking on an affiliate link, you accept that third-party cookies will be set.

Post new topic   Reply to topic    Bike Chat Forums Index -> Dear Auntie BCF... All times are GMT + 1 Hour
Goto page 1, 2  Next
Page 1 of 2

 
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum
You cannot attach files in this forum
You cannot download files in this forum

Read the Terms of Use! - Powered by phpBB © phpBB Group
 

Debug Mode: ON - Server: birks (www) - Page Generation Time: 0.09 Sec - Server Load: 0.26 - MySQL Queries: 17 - Page Size: 142.64 Kb