Remortgage for renovations

[LawnFever]

I feel like this is a silly question I should know so bare with me!

Can someone explain how remortgage works if I want to take some money out for some renovations? I’ve just never done it before, but I there’s enough equity in the house.

I want to get a new kitchen & downstairs all done up, and seems like it might be a good option to finance it.

Does it mean your mortgage payments increase or can you increase the term and keep the payments the same, or both? I’ve got a fixed term deal at the minute, I’m assuming I’ll need to wait until that’s up?

I can’t offer too much advice as DH sorted most of it but we waited until our fixed term was up, I don’t know if that was out of necessity or not. The mortgage advisor we had helped us a lot in sorting this out, they do this sort of thing all the time so if you speak to them about what you want they will be the best people to give you options.

We took out about 30k for an extension/kitchen. Our initial fixed term interest % was quite high, so our repayments actually turned out to be lower with a new mortgage with lower interest %. It would depend on your initial investment rate and therefore repayment amount, term and how much you want to borrow for what your new repayments would be I’m comparison to your amount.

You don’t have to wait until your fixed term is up. You can open a new mortgage part on a different product (with the same mortgage company). It would mean that your payment would go up as your not changing your original mortgage.
If you wait until your product ends you can remortgage with another company and borrow more - you’d discuss the term and product with a mortgage adviser at this stage. Or if you want to stay with the same company you can borrow more at the same time as picking a new product. Again you can discuss the term then but you’d probably have less flexibility to end the term then but that is dependent on the lender.

The fixed term is just the period over which you have a guaranteed interest rate. You can increase the term of the overall mortgage so you’re paying less each month, then borrow extra to end up on the same monthly payment. You might not get the same interest rate on the extra borrowing though.

We just got a second mortgage so the original one wasn’t affected. The new mortgage has the same length with small monthly payments and the mortgage company roll then in together so we just pay one amount each month

Thank you all that’s really helpful.

I’ll speak to the mortgage company and a mortgage advisor. I just felt like I didn’t really know what I should be asking then before and I hate feeling like that! I feel like I can have a proper conversation with them now, thanks

It depends on how much equity you have in your house. What is the value of your house and how much is outstanding to pay?