Would you take out another mortgage to finance an extension in these circumstances?

[HouseRenoOrNo]

We are thinking of doing a big extension to our house.

Currently, our house has enough bedrooms for everyone, although they are quite small and don't offer a lot of storage or space to put additional storage in.

We have a nice kitchen that fits our household in it adequately, but we struggle for space when we are hosting, which is something we really enjoy doing.

I'm saying all of this because I recognise that we don't need an extension, it's a want. We spend a lot of time in our house and get a lot of enjoyment out of it.

So my question is around the finances.

I'm in my mid 30s and my DH has just turned 40. We have aprx 250k outstanding on our mortgage and 25 years left to pay it off. Household income is aprx 120k.

The planned extension is likely to cost 150k which we would have to take out another mortgage on.

We are done with having kids and have factored in their childcare costs, so no upcoming maternity leaves etc to consider. Our salaries are likely to increase but I don't expect any massive jumps in income over the next few years.

Would you take on another mortgage to finance a house? We don't really have any significant debts beyond our current mortgage, so it feels like a big step to be committing to an extra (likely) £600-850 per month, which is affordable, but is a significant amount of money for a significant amount of time.

this is very true and also all 'hidden' costs like having to rebuy different furniture etc as new house different proportions, silly things you dont even consider at first.

Can you do 6 months of the extra mortgage payments amount into savings to see what it does to your lifestyle? Plus that will give you some extra savings to put towards it.

Slight different scenario here - I’m 40 and and my husband is 50. Two kids in primary. Household income £98k. House is worth about £350k and we have a £100k mortgage with 1.5 years left at just under 1%.

We wanted to extend and were quoted £70k … this additional borrowing would be at a much worse interest rate, and then in June 2026 the interest rate on the initial
mortgage will ??probably increase too.

I had my heart set on the extension, we have paid out money for plans, technical drawings and all the relevant permissions… but we’ve decided against it at the moment. Instead, we are going to make some changes internally, knockdown a wall internally and try and reconfigure what we have to make it work slightly better for us.

We’re also gonna put some patio doors on the on the kitchen instead of the small windows we have at the moment… These changes will improve things and will probably cost around £12k.

My husband is the higher earner and only has around 15 years of working life left and we want to focus on paying off the mortgage that we have. If we were still able to get a really really low interest rate things May have swung the other way.

difficult decision as we would have been accepted for the extra borrowing-we had an agreement in principle for it….but we just don’t want to spend the next 10 to 15 years stressing about money when we could make some significant improvements on what we already have, for a lot less money and without actually borrowing more. We will just do it incrementally when we have saved up a little bit of money here and there.

This is a good idea, yes, we could do this.

Will it extend the value of the house above the ceiling for your street?

I definitely see the appeal in this option. We don't have a lot of internal space free to use or knock into. We have kids and we need an office for WFH, so we really do use up all of our current space.

Consider just how often you really need this extra space, wouldn't retiring earlier be more attractive? I wouldn't want to be paying a mortgage past 60, you may need to drop hours etc. you can overpay if you don't take out more, it's a fairly large mortgage still with 25 years to pay (I thought that was the max, I'm out of touch!)

Depending on your layout, an option to maximise office space use is bifold doors, means when not being used as an office you can increase the floor space of the room it comes off, I know two people who have done this. Alternatively an office big enough is a good snug for older dc playing noisy video games, think pull down desk making it more spacious, lots of possibilities

We've just done this kind of extension, from savings rather than mortgage increase though. It's amazing to have the space but I'm still a bit overwhelmed by how much we've spent when we didn't actually need the space. Feel very conscious that I have zero savings available now, definitely make sure you have a 10% buffer round whatever quote you get. Also it's been a very long seven months of building works!

If it’s for office / kid space I know a few people who have had really lovely garden rooms done, although I don’t know how the costs of those compare to an extension.

It isn't for an office. It's mostly that the kitchen adequately accommodates our immediate family, but when we want to invite people over, whether they're our friends and extended family or the kids friends, things are really tight. I suppose I'm also thinking of the future a bit and how we would accommodate kids plus partners or our kids plus some of their kids. That is getting ahead of myself, I know. But even now it would be nice to have more space.

Some sort of boot room/storage room/pantry would also be really helpful.

We’ve always been over cautious with borrowing too much and in hindsight I would have taken a bit more of a risk than we did earlier on. If you are already thinking space is tight, then the way I’d look at it is that kids are more likely to be at home into adulthood than in previous years so more space is likely to be needed. For us, our criteria in our last move was big enough bedrooms for all to live in as adults, a spare room for guests and two living spaces for when you dont want to be on top of each other plus enough driveway for all adults to have a car. Now post covid, I would say office space is also a consideration. If circumstances change adversely, you can always sell up and down size but harder to upsize later in life..

Having said that, do you need to consider being able to pay for university costs (I.e maintenance loan top up)? Are you saving enough for retirement?

Lots to consider…

Yes, the kids staying around past 18 is a factor. I'd like to be able to accommodate them for as long as they need it, really. I'd also love for my teenagers to be able to use our house to socialise or even have room for partners in the future if they're saving to get on the property ladder in their 20s etc.

We are very family and home orientated. Of course they might all fly the nest at 18 and never come back, but one is ND and currently loves being at home, another looks more likely to do a trade or some sort of an apprenticeship rather than uni.

We moved at this stage of life (but the figures are similar to yours if you extend). I never regretted the extra expense and always knew there was the option to downsize if I needed/wanted to.

OP we are in a similar position to you. We are in our 40s, joint income is about £120k. We don't plan on having more children and we have enough space but there I things I want like a big kitchen for hosting, laundry room, downstairs loo. Remortgaging doesn't put me off. My main concern is all the mess!

The thing with going for another house is whether you'd find one with everything you want, right location, nice garden, and would it still need work doing. I haven't seen any houses that are within our budget, have everything we want and wouldn't need substantial work anyway (such as kitchen, bathroom). By all means, look at houses and see if anything interests you.

We've just done similar though we're older. First time I have ever done something so financially indulgent and I still get pangs of guilt. Also it cost so much more than expected and was very stressful. That said, I'm so glad we did it. The house is now perfect for us and I get daily 'pinch me is this real' moments. I'd prefer to work a few years longer but fill the house with friends and family in the meantime. Yes, could have done that pre- extension, but Christmas and NYE was so much easier for me as host.

It's a very personal section - good luck!

Yes, this is what we are finding. We find houses that nearly fit our requirements but we would need/want to do work to get exactly what we want and it makes us wonder why we don't just do that work to our house.

We have a big enough plot size to accommodate building work without it compromising our outside space in any meaningful way.

Aside from the mortgage, one other thing that really puts me off is that I'm not that "in" to interiors. I actually find all of that a bit overwhelming.

I need Phil and Kirstie 😂

Thanks for everyone's responses. I might not have replied to everyone but I did read them all and I'm grateful for the feedback.

We've just spoken to a friend for whom it took 2 years to get her plans passed.

So current plans are to speak to an architect, get some plans drawn up and then see where things lie with the economy etc then. If the plans go through and things have gone sideways we can always just leave it.

Sounds sensible. I'd also follow the previous posters advice to start living as if you're paying the higher mortgage. That way you're getting a true picture of compromises and will have a nice little fund to either put in the renovation pot, or take a nice holiday when it all gets too much!

We ended up shelving our extension due to cost, but we are in a different position to you. When you're speaking to architects / builders just give them what you're trying to solve, rather than say outright an extension of x size. They might come up with something you haven't thought of and it could come in less. Good luck with it all, it's exciting!

Like others have said, see how much you can save in two years. Live like you have already taken out the extra mortgage.

It’s pretty well accepted that with costs the way they are, you will spend more than you’ll gain in value.

You also have to live with the noise, mess and disruption.

By far, the best option is to move to a bigger house.

The only way I would do this is if I was utterly certain there was no alternative and that it was a definite forever home.

I am concerned about this. And also worried about what's going on with the economy as a whole.

ETA: worried about costs spiralling

I wouldn’t want a larger mortgage now for longer. The interest rates could still go even higher and I wouldn’t want that.

I would probably look at option 2:
Garden office with laundry space. You could get a really nice one with utility area for about £25-30k, all with electric and plumbing.

This would free up current laundry area in house for pantry.

Current office room indoors becomes free. Depending on room you could maybe extend two bedrooms into that office space to make 2 larger bedrooms. Or free up for playroom/ teenager PlayStation hang out/ second lounge for reading.

Can you add some kind of small front porch on for shoe storage. Or front garden small lockable storage shed for kids scooters etc

it also might be worth getting an architect to look at current floor plans and see if walls can be moved and layout changed without an extension

It depends on how the additional mortgage/re mortgage affects your monthly finances and whether you can manage or want to sacrifice that much just for a bit of extra space that doesn't make a huge amount of difference to you life, but just sounds 'nice to have for guests'.

If you had to save up in advance for the extension for years, would the answer still be the same?