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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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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 may therefore be possible without tipping you into a higher LTV bracket.

Another option is to take a further advance. This is similar to remortgaging, but you agree with your existing mortgage lender to take a loan for an additional sum to cover the building works on your home. This may be charged at the same rate as your mortgage or potentially a different rate.

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
Accord Intermediary 2 Year Discount £1495 Fee ACC0.97%DiscountJul-20204.99%4.4%31-Jul-2020 £1495
Clydesdale Bank Intermediary 2 Year Discount £1449 Fee CLY0.99%DiscountJul-20204.95%4.3%2 years £1449
Progressive BS 2 Year Discount No Fee Purchase BPG0.99%Discount2 years 4.75%4.3%2 years £0
Monmouthshire BS 2 Year Discount £1999 Fee Purchase BMO0.99%Discount2 years 4.99%4.4%2 years £2149
Accord Intermediary 2 Year Discount £495 Fee ACC1.19%DiscountJul-20204.99%4.4%31-Jul-2020 £495
Leeds BS 2 Year Tracker £999 Fee BLH1.19%TrackerJun-20205.69%4.8%30-Jun-2020 £999
Nationwide BS RETENTION 2 Year Tracker £999 Fee Existing Borrowers Cashback BNW1.19%Tracker2 years 3.99%3.6% £999
Nationwide BS 2 Year Tracker £999 Fee BNW1.19%Tracker2 years 3.99%3.5% £999
Nationwide BS FTB 2 Year Tracker £999 Fee Cashback BNW1.19%Tracker2 years 3.99%3.6% £999
Nationwide BS RETENTION 2 Year Tracker £999 Fee Existing Borrowers BiR BNW1.19%Tracker2 years 3.99%4% £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.
Instant Decisions with No Credit Scoring

In assessing your requirements, we do not use credit scoring and we can provide an accurate estimate of the amount of borrowing and the viability of your requirements, without effecting your credit score.

We avoid credit searches at the initial stages given that numerous credit searches will impact your ability to access cheap credit. It is clear that too many credit applications in a short period of time will impact your score and whilst it is important to shop around, formal applications for a mortgage can trigger rejections, as it gives the impression you may be desperate for credit. It is essential when making enquiries for any financial product, that the Company does not credit score you, until such time as you have agreed to make a formal application.

We can indicate your chances of approval prior to any application being made and where necessary, can obtain decisions in principle from lenders who do not use credit scoring.

 

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