Remortgaging and borrowing more

[Notyetthere]

Now that we have all the quotes for the work we want to do to our house, we now know how much extra we need to borrow to complete the work next year spring/summer.

Our current fixed mortgage rate will come to an end In March 2019. At that point, LTV will be 57% which means we can pick a 60% LTV product. Assuming house prices fall off the cliff due to brexit.

My confusion is what happens next. I understand that we can go for the extra borrowing anytime now, if we want. And that we then end up with 2 mortgage products at the same time. So if we say, decided to borrow the extra amount just after the remortgage of the original amount, how do they decide what rate? The extra amount pushes the LTV to 71%. Would that mean that we end up with two mortgage products one at 60% LTV and another at 75% LTV? Or have I got it all wrong and that we would need to apply for a whole new mortgage to cover the whole mortgage(original + extra borrowing) with an overall LTV OF 75%?

It depends what your numbers are and how long the building work will take.

One option is to borrow more in spring 2019 on a standard rate (rather than a fixed rate deal) - it will run along side your current mortgage which presumably will revert to the standard variable rate (SVR) in March. Then, once the building work is complete, you remortgage for everything (the mortgage & the extra you borrowed) as the new (higher) value of the completed house will mean you get a very low LTV.

Or, you could remortgage in March and get enough for the build, but the value of your house will be it's current unextended value so the LTV will be higher and the rate won't be as good.

Or you remortgage in March on say a 2 yr deal, then borrow when you need it (not on a fixed rate, or a fixed rate with minimal early redemption charges) then remortgage all of it in say May 2021.

Just work through the numbers to see which is likely to be better financially.

When we borrowed more I was assuming we would remortgage it the bank did a separate loan. So we have two separate mortgages running. In our case these even have different terms as I felt payments were a bit high to do the additional loan at the remaining term. At some point I will remortgage and roll them into one loan.

Namechange thank you for your response. We are not extending so not sure the work would add much value to the property to push it into a lower LTV but I hadn't actually considered your first suggestion so definitely worth considering. We are in the lucky position thst ever since we bought the house 5yrs ago it's value has increased by almost 40% without us doing anything so it has presented us with an opportunity to make it the way we want whilst still retaining almost 30% equity.

We are going to knock a wall down between dining and kitchen to have a larger kitchen with maybe an island. We currently use the conservatory as a dining space which suits us.

We would also like to install a downstairs toilet,

block pave our currently tired potholed full of weeds drive and

Install a solid roof on the conservatory.

The project will be funded from savings and extra borrowing on the mortgage.

Bollocks I understood that we would probably end up with 2 mortgages SO thank you for confirmating. I actually don't mind this as it means we would have the larger amount (original mortgage) on the lower interest rate and the higher rate on the smaller amount.

Hopefully then when we remortgage again in a few yrs' time we would have dropped down to a favourable LTV.

Or have I got it all wrong?