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Home Improvement Mortgage

As house prices have risen over the years, so have the costs of moving. Stamp duty in areas where house prices are high, can now run into the tens of thousands - putting many people off moving house altogether. But the reasons most people move to a new home remain - having children and needing more space, getting older and having different priorities for the space you have at home. These are things that happen to all of use, the rising cost of stamp duty notwithstanding.

As a result, many people are now choosing to make improvements to their existing homes rather than buying a new property that suits their needs. For the majority, it makes more sense to spend £40,000 on extending the kitchen and adding a bedroom than simply handing it over to the tax man.

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Mehran Heidari - Remortgage
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Find out more

There are many ways to fund home improvements - and the best one for you will depend on a range of factors, including your age, stage and what sort of mortgage you're on at the moment.

What are the Options?

The most typical way to raise money to fund home improvements is to remortgage and take a bigger loan. This can be the cheapest option, as standard mortgage rates are usually the lowest.

If you've been in your home for a few years, it's possible that it has risen in value. You should also have been paying down your mortgage. Both of these factors mean that your loan-to-value ratio is likely to have come down. The lower the mortgage balance compared to the value of the property, the cheaper the mortgage rate.

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Remortgaging with a bigger mortgage balance

Remortgaging with a bigger mortgage balance may therefore be possible without tipping you into a higher LTV bracket.

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Family Savings

Some parents have savings but don’t want to part with them just yet. That said, they may be sitting in an account earning next to no interest. There are a number of smaller building societies and one or two banks that will allow your parents or grandparent to deposit savings equivalent to your deposit with them and then they will provide you with a mortgage for the full value of the property you’re looking to buy.

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Second Charge Mortgage

The third option is to take a second charge mortgage. Second mortgages can be taken with the same lender or a different lender. The rate and terms of the second mortgage are different from the first. Second charges tend to be the most expensive of these three options and as well as the slightly higher rate, there are fees to consider.

Before agreeing which option could be right for you, we would look at all three and ensure that you are getting the best deal for your circumstances. For example, it might make sense taking a more expensive second mortgage to fund the improvements if you are currently on a very low lifetime tracker mortgage rate for your first mortgage, as remortgaging would mean you lose this and pay a higher rate on this portion of your loan.

Find Out Current Best Rates

Property Value
£
Mortgage Amount
£
Reason for Mortgage
Mortgage Type
Lender Initial Rate Type For Then APR* ERC* Fee
Progressive BS 2 Year Discount No Fee Purchase BPG1.29%Discount2 years 5%4.56%2 years £0
Leeds BS 2 Year Tracker £999 Fee Legal Assisted BLH1.32%TrackerJan-20215.69%4.8%31-Jan-2021 £999
Accord Intermediary 2 Year Discount £1495 Fee ACC1.34%DiscountFeb-20214.99%4.2% £1495
Leeds BS 2 Year Fixed £1999 Fee BLH1.39%FixedJan-20215.69%4.8%31-Jan-2021 £1999
Skipton BS 2 Year Tracker £995 Fee SBS1.41%Tracker2 years 4.99%4.3% £995
Halifax Intermediary FTB 2 Year Tracker £999 Fee BHX1.42%TrackerMar-20214.24%4%31-Mar-2021 £999
Halifax Intermediary 2 Year Tracker £999 Fee Purchase BHX1.42%TrackerMar-20214.24%4%31-Mar-2021 £999
Santander UK Plc 2 Year Tracker £999 Fee Porting CAN1.44%Tracker2 years 4%3.4% £999
Nationwide BS RETENTION 2 Year Tracker £999 Fee Existing Borrowers Cashback BNW1.44%Tracker2 years 4.24%3.8% £999
Nationwide BS 2 Year Tracker £999 Fee BNW1.44%Tracker2 years 4.24%3.8% £999
Mortgage product availability is subject to status and availability. Although great care is taken to ensure that product details are as accurate as possible no liability can be accepted for errors or omissions.
*APR = Annual Percentage Rate *ERC = Early Repayment Charge
*These figures are only illustrative. An assessment of your needs will be confirmed before a recommendation can be made. A Key Facts Illustration, which is personal to your circumstances, will be provided if a recommendation for a mortgage product is made.

Best Discounted Rates

LenderRateType
Yorkshire Building Society Direct 2 Year Discount £1495 Fee YBS1.17%
then 4.99
(variable)
DiscountRead More
Progressive BS 2 Year Discount No Fee Purchase BPG1.29%
then 5
(variable)
DiscountRead More
Accord Intermediary 2 Year Discount £1495 Fee ACC1.34%
then 4.99
(variable)
DiscountRead More

Best 5 Year Fixed Rates

LenderRateType
Leeds BS 2 Year Fixed £1999 Fee BLH1.39%
then 5.69
(variable)
FixedRead More
Yorkshire Building Society Direct 2 Year Fixed £995 Fee £250 Cashback Purchase YBS1.43%
then 4.99
(variable)
FixedRead More
TSB Intermediary 2 Year Fixed £995 Fee Purchase TSB1.49%
then 4.24
(variable)
FixedRead More
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