Rebuilding a house - how does the mortgage financing work?

[subirg]

So here's the scenario. We are considering knocking down our house and rebuilding to make it the way we want it, and bigger. The question we need some help with is understanding how the mortgage would work. The situation is something like this (all numbers are fictitious but proportions are in the right ball park).

- Original property purchase price - £500k
- Current Mortgage - 50% LTV
- Estimated rebuild cost £300k
- Estimated value after rebuild - £1m

Some questions:

- Will existing lenders consider increasing the existing mortgage to cover the rebuild cost?
- How much £ do we need to save before the project becomes viable (i.e. if we have £250k equity (50% of current value) how much more do we need?
- What else do we need to consider (apart from where to live once the old house is a pile of shattered bricks and broken glass)?

Thanks all!