Loan instead of remortgage …

[friedbrainrightnow]

Is this possible? Is it crazy?

We need to extend (ignore the fact that that might not be ideal right now).

Instead of remortgaging and taking our mortgage to 90%LTV could we remortgage with no additional borrowing over a longer term to reduce payments to around £150pm and get a large loan for the extension instead?

My brain isn’t working properly tonight so I can’t even work out if this is an option. I’m thinking £40k or thereabouts loan? We could probably juggle credit cards etc for extra borrowing.

A quick look on L&C told me that the best mortgage rate we could get would be around 4.5%. Not sure of loan rates!

So if this was all possible - is it a good idea?

It is definitely not a good idea imo. Taking out loans + juggling credit cards for cash flow for an extension? Not a chance in this economy. I'd remortgage if necessary (near end of fixed rate etc) but I wouldn't be taking on extra insecure borrowing.

*unsecured

I definitely wouldn’t do that. It’s much better to secure a loan against your property, I.e borrow on your mortgage. It’s much lower risk

Thanks both I really wasn’t sure but got my answer now :)

It's not worth it. Your LTV will only be 90% until the works are complete and then your property price will increase.

We released £45k two years ago for our extension and took the LTV 79%. Now with the additional rooms, our LTV is 43%.

For the £45k release, our payments increased by £95 a month.