A (hopefully) simple mortgage question

[SteveScooby]

I’m looking for a bit of guidance on a remortgage.

Currently owe £110k at 1.79% fixed until October, house value is roughly £230k. By renewal we’ll owe £105k, so well in to the “best” LTV rates

We want to extend, which we will need to borrow around £70k for, so total borrowing of £175k.

Will the bank take in to account that the extra money we borrow will be used to increase value of property and allow us access to the 60% rates.

If not is it best remortgaging with a shorter deal period and then remortgaging again once it’s complete. Ie take out a 2 year deal later in the year rather than a 5 like I otherwise would.

Or is there another way?

[Sarnie]

They won't take into account any future value increase, what if you didn't do the work?

You could take a product with no ERC's and then look to remortgage off it once the work was done...........

[SteveScooby]

Thank you, I thought that would be the case.

[mikey_b]

I had to do that when extending my house, for the reasons Sarnie has said. So we went from a relatively comfortable ~60% LTV to about 95% (which meant we went from about £900 to £1500 a month) but took out only a 2 year deal.

It stings at the time but it's only for a relatively short time. After 2 years we were able to remortgage again, and got back to about 60% LTV and saved about £250 a month.

Not only does the second remortgage take into account the value of the work you had done, but if there has been any uplift in house prices in the meantime, that helps with LTV too.