Can an extension affect mortgage?

Hoop66

Hi,

A question for those in the know:

We are about to build an extension to our house - it will basically extend the kitchen/dining on the ground floor and add a bedroom & bathroom on the 1st floor. Total build budget will be a bit over 100k.

Can I ask my mortgage provider to give us a beter deal, since that the security for the loan they gave us will now be worth a good bit more?

Or are the they likely to tell us to foxtrot oscar, given that the house (once extended) will probably only be worth what we paid for it originally?

Thanks in advance.

Arbiter of Good Taste

Presumably you are either borrowing to do the extension or using your savings. I'd say from the bank's perspective you are then considered less liquid and therefore a greater risk, so no.

Mrs OBumble

I'd start the dancing practise now :-)

Victor

If you are spending your own money, then the bank may be will to reduce your rate slightly, assuming there is a material shift in the equity ratio.

If you are financing it with borrowing, the bank may be more concerned.

Hoop66

We are funding it without borrowing, so hopefully they'll be reasonable...

L1011

First thing to check is that your bank even offers lower rates for better LTV%, if not you'll need to look at changing lender which has inherent costs. Even if they do, you're going to have to pay for a new valuation and your going to have to insure the new rebuild cost (which you should be doing anyway) so your house insurance will go up.