Anyone on the verge on yay or nay to extension worried like us?!

[Minnie888]

We have been planning an extension, fairly standard 1.5 storey, for a couple of years now. Done planning and detailed design and had a builder lined up... due to start Jan/Feb 23. We applied for the mortgage a few weeks ago and in the space of a week when we first enquired, interest rates went from 3.3% to 4.5% we got! They are now at 6%! We can afford the building work with this mortgage but it is literally the same amount we have been quoted. We need to make a decision soon and have been doing forecasting etc, how much interest in the future would break us etc but it is such a big decision I am struggling with it. Saying that I am not keen on not doing it either, it's our forever home and it really would help with space.

Anyone else in a similar position? We have some savings to pay for extras but not unlimited... what if we end up with 10% interest rates in a couple of years! I'm usually and optimist but on the other side for this one!

We’ve just remortgaged to a 5yr fix, and are starting the second phase of our building work in Jan. Porch extension and converting a downstairs cloakroom to a bathroom.
The different being we are paying for the work from savings. The price of everything is going up so we thought better now than later.

That's helpful... I think important to think about material cost and how that might change going forwards... feels like an odd time to say yes to additional borrowing though with the news on repeat about cost of living crisis etc

We're going back and forth on it. We have savings to do a chunk of it, but wondering whether costs might spiral with what's going on at the moment. The house needs work, but we're wondering whether to limit the scope of it, and pay down a chunk of the mortgage with the rest. Interested in what others are deciding to do

I’m definitely going to wait and save. I initially was going to spend £30 K extending the back of our house but now I think with the situation/costs as it is I’d probably rather move and get the extra space that way. If house prices drop which is a big if nobody knows I would actually be better off keeping hold of the house and using the 30 K as a 10% deposit on the next step up.

Thats it, if you cant afford it start saving up until you can, cheap debt is gone, start going back to the old ways folks.

Unless you have a good contingency I wouldn't. I've not had a project yet that has stuck to the original budget.

Very rarely do you find a house that you would not want to do some work on. At least refurbish parts of it, if not extend.

We’re doing the same as you.

We’ve shelved an extension we can afford on paper. Like others say it’s about the price increases between now and the end of the project. Everything is going up and up. The same extension would have been half the quoted price 2 years ago. That makes no financial sense to us so we’re not proceeding. I can’t imagine sitting here in 6 months with it all sky rocketing and wishing I’d been content with what I had through this shit.

We've held off starting to plan the several projects that need doing even though we really need the space. With the way everything has gone up, we have quite a bit less left at the end of every month than we used to so if we spent savings on building work, topping them back up again is going to take much longer. We've decided we need to keep more of savings cushion should e.g. the boiler break, and for the next couple of years we're going to focus on paying a chunk of the mortgage off instead. Once we've remortgaged when our fix finishes (in summer 2024) and we know what interest rate we'll be paying then we'll re-evaluate.

The problem is that building cost may never come back down substantially especially as the pound continues to weaken. So sad that this might be the new normal. We are biting the bullet and building the shell of the extension because this is likely to be the costs that won’t come down. We’ll do the painting, decorating and so on as we go along.

Same as us in regards to when main mortgage will be up. Makes more sense to wait despite other factors.

I think we've decided to delay for 12 months. It aligns better with when our mortgage is up for renewal and we might know more on this shit show and financial markets... better this happened now though than after the extra loan.

Now deciding whether to pay off the mortgage more in those 12 months or put into savings. Thinking mortgage as interest rates for savings still fairly poor.

I do you think building costs will come back down again my friend said in May hang on until October and you’ll notice a big difference and he was right I have. All of the main kitchen suppliers have got cracking sales on at the moment same with the bathrooms, the labour might still be expensive but let’s sit back and see.

We pulled out and rates were 2.5% at that time but with the predicted increase when we were renewing, plus elevated prices for doing the works themselves it was just a no brainer for us not to continue. You’ve got to do what works for you, we know other people who are continuing

We've gone ahead with ours and had a second mortgage to pay for it at 2.5%. I think once prices go up they very rarely come down and it's now or never, especially with interest rates. We are lucky that we could afford to borrow a bit more than we need, so if it goes over the quote we should hopefully be OK. If we were to buy a house the size we want it would far outweigh the cost of the extension and or original mortgage, even if house prices do drop by 10-20%. It's a very difficult time and a difficult decision to make. All you can do is what you feel comfortable with.

I think it's a very personal decision about risk tolerance. As others have said, if we wait building costs may well be higher. However, at the moment everything feels so up in the air, increasing our resilience to things like cost of living increases or any knock on impacts of the recession that is looming (such as one of us being made redundant) feels a priority.

I'm also aware that I'm already finding it hard juggling 3 DC and working, chucking in organising a project which is guaranteed to be stressful because of continuously climbing costs and difficulty in securing labour feels like it could tip me over the edge!