Help me with my mortgage renewal?!

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So our current 2 year fixed mortgage is due to expire in April 2019. This is the first fixed deal we have had since buying the property in 2017, and the original mortgage was 90%.

Since purchase, we have carried out extensive renovations and between this and properties increasing in value in our area, I imagine our house to now be worth £30-£40k more than the purchase price, based on what other properties have sold for. For context our property was 'cheap' in relative terms as work was unavoidably required.

So our mortgage renewal interest percentage (with the same provider) would appear to be based on LTV %. If our house has increased in value, this would mean that our LTV bracket is now less %, right? But how does our mortgage provider know this? Do we have to pay for a valuation ahead of renewing our deal?

In addition, I would like to take £5-8k out of the property to carry out some further work to the house, as borrowing money against the equity at 2-3% seams cheap and sensible... rather than using loans or savings.

Regarding our income and credit position, nothing has altered particularly - small amount of loan/credit card balance which as been spent on the house, and income has actually increased by about £6k a year.

So any advise as to how to tackle the renewal, or what I can expect when speaking to the provider would be great. This will be the first time I speak with the provider directly as our original arrangement was via a broker. Thanks!

Who is your mortgage with?

Just tell them what you have posted and take info about your pay with you. They will need to advise you so it’s their job to ask the right questions and cover all the bases.

Be aware that borrowing money at 2-3% over the term of the mortgage isn't necessarily cheaper than a personal loan, where rates start at this level but the term is much shorter) or using credit cards if you can transfer the balance to a 0% deal. Especially if the extra borrowing pushes you into a higher LTV bracket. If you do borrow extra on the mortgage, try to overpay to reduce interest payable.

I used to work in mortgage servicing at Halifax so I might be able to help.

It's technically not a remortgage as your staying with the same mortgage provider. What they would do is put you on a new product (fixed, tracker, variable etc) a remortgage is when you move your mortgage to a new mortgage provider

Your mortgage provider will not do a valuation of the property unless you push for it. Most mortgage providers will have their own process on how they have a value (some use a average of the properties on the street your on) honestly it's not worth it unless the new value puts your LTV under 90% 80% 75% as you will get slightly better rates but you can talk to them to see if it's even worth it as most rates are not much different atm with the base rate being so low. Only really makes a difference if you have a huge mortgage.

The additional borrowing depends entirely on how much you want and if you have enough equity in the property. Anything up to £25k you can get as a personal loan- rates are slightly higher but less term so it's paid off quicker so saves you money in terms of interest.

It's always worth shopping round. Speak to your mortgage company. Ask all the questions you have here. Your not contracted until you say yes to something. Write it all down and either go to a broker or compare online. Be aware that if you remortgage to another provider that you will have a lot of fees to move across to them.

I hope that all helps. Sorry for the war and peace

Sorry forgot to add that when you speak to your provider that they are sales people. They can not advise you. But give them all the information and ask for all the options. Without the extra borrowing, if the value of the property is so much etc. I re-read your post and for 8k your better off getting a personal loan than putting it onto the mortgage as it will be put under a product (fixed, tracker etc) that you will be only allowed to pay off 10% per year without incurring a early repayment charge. Most loans you can pay back as quickly as you want. With your income increasing you would be able to pay back much quicker than that amount on your mortgage.

You could go back to your broker a bit nearer the time to see if they can get you a better deal elsewhere

Sorry forgot to add that when you speak to your provider that they are sales people. They can not advise you

They absolutely can advise you if they are CeMAP qualified mortgage advisers.

Sorry yes they can if they are cemap qualified but the majority of banks and mortgage providers have gone away from this completely since when you are advised and something goes wrong you can then complain and the FSE has been siding with customers. There are hardly any people advising anymore. A lot of brokers have stopped now as well and should tell you that they can not advise you. Only person who should be advising you is a financial advisor who is independent. When i worked in mortgages only people in branch where trained but where becoming very few and far between. It's certainly a lot cheaper to not do the qualification not advise just show customers the options for them to choose

Thanks to everyone who has taken time to respond! Ipchill that's very informative and i'll be re-reading your advice more closely before doing anything.

I was concerned that taking personal loans out would affect our affordability for re-mortgaging but this sounds like not necessarily to be the case if we don't change provider. We're with a large mainstream bank so I don't really want to go to the trouble and expense of either switching provider or paying a broker to arrange it, as stated the rates are so preferential at the moment it hardly seams worth it.

Every time my mortgage is due for renewal I see my independent Financial Advisor who finds me the best suitable deal. You don’t have to stay with the same provider, you could get a better offer elsewhere.

If you do stay with them they will just switch you from one product to another, they won’t do a valuation.

I fixed for five years again in February.

That’s weird Ipchill, I work for a major high street lender and we all have to be CeMAP qualified to be able to sell mortgages, there is no “non advice” option unless on line, and we are heavily regulated by the FCA. It was my understanding that all lenders had to take this approach following MMR in 2014.