Hello!
I’m hopefully moving house in the next few months (having a buyer lined up on my new place and have had an offer of mine accepted on the new home). Very exciting!
We really like the idea of doing a substantial loft extension and/or a extension to the rear of the house. Both really, but it’s not obvious which would be best until we’ve lived in the thing.
We have a pretty chunky deposit meaning that we if we used the whole thing towards the house, we’d put ourselves at the 75% LTV rates, which is great. The house is in the £500-600k range so the slightest increase in percentages does mean a pretty gnarly jump in interest paid per year.
One obvious way of funding the extension would be to use less of our deposit towards the house, keep the cash in the bank (~£70k-£80k), and have a higher LTV on the mortgage. But by my calculations we’ll end up paying about £12k a year more in interest paid on the whole of the borrowing, which seems mad - ouch!
Edit - it’s actually £6.5k pa
In short, how have people funded house extensions in the past? Or what is the generally accepted best way of doing it?
To my mind, it makes more sense and is more prudent to get the house at the best LTV rate now and then reconsider extensions at the point our 2 year fixed term comes to an end (rather than having cash needlessly lying around whilst we finalise our plans). I guess I’m just a little impatient and want the best house possible up front.
Interested in what people have to say.
Cheers!
I’m hopefully moving house in the next few months (having a buyer lined up on my new place and have had an offer of mine accepted on the new home). Very exciting!
We really like the idea of doing a substantial loft extension and/or a extension to the rear of the house. Both really, but it’s not obvious which would be best until we’ve lived in the thing.
We have a pretty chunky deposit meaning that we if we used the whole thing towards the house, we’d put ourselves at the 75% LTV rates, which is great. The house is in the £500-600k range so the slightest increase in percentages does mean a pretty gnarly jump in interest paid per year.
One obvious way of funding the extension would be to use less of our deposit towards the house, keep the cash in the bank (~£70k-£80k), and have a higher LTV on the mortgage. But by my calculations we’ll end up paying about £12k a year more in interest paid on the whole of the borrowing, which seems mad - ouch!
Edit - it’s actually £6.5k pa
In short, how have people funded house extensions in the past? Or what is the generally accepted best way of doing it?
To my mind, it makes more sense and is more prudent to get the house at the best LTV rate now and then reconsider extensions at the point our 2 year fixed term comes to an end (rather than having cash needlessly lying around whilst we finalise our plans). I guess I’m just a little impatient and want the best house possible up front.
Interested in what people have to say.
Cheers!
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