Extension vs Saving/Paying off mortgage

[emma16]

So, a bit of a dilemma which i know isn't really a first world problem but just need some advice from others.

My DH & I have saved £18k up over the past 3 years via his share scheme at work (£500 a month which we will now get back starting in May pay packet) in the hope we would make some money but unfortunately not...we get back what we put in tho.
We'd always thought we would just bank it and use it to pay off our mortgage at some point or when it got right down.

DH brings around £3700 a month home after £600 going into his pension, i earn £800 a month working part time. We owe around £109k on a house worth £238k with a 12 year mortgage. Kids 15 & 10.
They reckon in around 10 years redundancy's are possible where DH works as plant life will come to an end, so he always has this in his mind financially and to ensure we are mortgage free by then.

Now i have been looking at getting some quotes on an extension on the side of our house which would provide another living space of approx 5m x 5m joined on to large kitchen space.
I don't want to waste our £18k or have it just sat in a savings earning practically nothing so the idea of investing it into our home where we also benefit from it, is a good i think??
We have around £7k in savings ourselves in the bank and by the time it came to it we could have £30k saved up and borrow around £10k on the mortgage.

What would you do in our circumstances? Bank it and sit on it, or extend and add value plus gain some enjoyment from your hard earnt?

£30k for 25 square metres is possible to first fix. It won’t be if you need to kit out a new kitchen or have new windows/doors/bifold door, etc. However, I think on an income of £4500 pcm and a relatively modest mortgage of £109k with 12 yrs to go, you can afford it even if you need to borrow/add another £10k onto your mortgage. It’s cheaper than moving house. Personally, I wouldn’t worry about potential redundancy in 10 yrs’ time but that is from the perspective of someone who has not worked anywhere for more than 8yrs.

Pay off the mortgage !

Do the extension THEN pay off the mortgage

we have a family home that becomes the forever house when the kids move out

Also depends on the interest rate and term of your mortgage. We're about to extend & do an attic conversion for a bathroom/laundry but managed to get a 5 year fixed rate mortgage at 1.3% for 20 years so we could afford to do it now & look to start overpaying the mortgage once we complete the work without having to worry about rate rises.

Given it looks like rates are on the rise again (albeit slowly) it might be worth making sure you're regular payments are sorted first if they aren't already?