Are you dreaming of transforming your home with some much-needed renovations? Whether it’s a new kitchen, an extension, or a full home makeover, borrowing extra on your mortgage could be a smart way to fund your project. With rising house prices and the cost of moving becoming more expensive, many homeowners are choosing to improve their current property rather than relocate.
In this article, we’ll explore how you can borrow extra on your mortgage to finance your home renovations and provide tips on making the process as smooth as possible. Plus, once your project is complete, we’ll explain how we can help with home insurance and ensuring you have the right life insurance in place to protect your family and investment.
How Can You Borrow Extra on Your Mortgage?
Borrowing extra on your mortgage, also known as remortgaging with additional borrowing, is one of the most popular ways to fund home improvements. By increasing your mortgage amount, you can release equity from your home to cover the costs of your renovation project.
Here’s how it works:
Assess the Equity in Your Home
The amount you can borrow depends on how much equity you have in your property. Equity is the difference between your home’s value and the amount you still owe on your mortgage. For example, if your home is worth £300,000 and your outstanding mortgage is £200,000, you have £100,000 in equity. Many lenders allow you to borrow up to 85% of your home’s value, so in this case, you could potentially borrow an additional sum.
Before making any decisions, it’s important to speak to a trusted mortgage broker. They will assess your financial situation, help you understand how much you can borrow, and guide you through the best options. Not all lenders will offer the same terms, so using a broker can ensure you access the best deals and rates available, some of which may not be available directly through banks and building societies.
Check Your Affordability
Lenders will assess your ability to repay the additional borrowing based on your income, outgoings, and credit score. It’s essential to be sure you can afford the increased monthly payments without putting undue strain on your finances.
The Benefits of Borrowing Extra on Your Mortgage for Renovations
Borrowing extra on your mortgage can be a great way to finance your renovations, with several advantages over other types of credit:
Lower Interest Rates
Mortgage rates tend to be lower than those on personal loans or credit cards, which means you could save money on interest payments over the long term.
Longer Repayment Period
Mortgages offer long repayment periods, typically over 25 years. This means you can spread the cost of your renovation over a longer period, making the monthly repayments more affordable.
Increase the Value of Your Home
Well-executed home improvements can increase the value of your property. By investing in renovations, you’re not only creating a more comfortable living space but also potentially boosting the market value of your home.
What Types of Renovations Can You Fund with Extra Borrowing?
There are plenty of home improvements that homeowners fund by borrowing extra on their mortgage. Some popular projects include:
- Kitchen and Bathroom Upgrades: A modern, updated kitchen or bathroom can significantly enhance your living space and add value to your property.
- Extensions: Adding more square footage to your home, such as a conservatory or an extra bedroom, can increase both the functionality and value of your property.
- Loft Conversions: Turning unused loft space into a new room can provide more living space without changing the home’s overall footprint.
- Energy-Efficient Improvements: Investing in new windows, insulation, or solar panels can reduce your energy bills and make your home more eco-friendly.
Considerations Before Borrowing Extra on Your Mortgage
While borrowing extra on your mortgage can be an excellent way to finance home renovations, it’s important to weigh up the pros and cons before proceeding:
Increased Mortgage Payments
Borrowing more will increase your monthly mortgage payments. It’s important to ensure that these additional payments are affordable within your current budget.
Fees and Charges
Remortgaging often comes with fees, such as arrangement fees, valuation fees, and early repayment charges if you’re leaving your current mortgage deal. Be sure to factor in these costs when deciding if borrowing extra is the right move for you.
Long-Term Financial Commitment
Keep in mind that borrowing more on your mortgage means taking on extra debt, which could impact your long-term finances. Ensure that any renovations add real value to your property and are worth the additional borrowing.
How We Can Help
At My Finance Friend, we’re here to guide you through the entire process of borrowing extra on your mortgage for renovations. As an experienced mortgage broker, we have access to exclusive deals that may not be available through banks and building societies, ensuring you get the best possible terms for your additional borrowing.
Don’t Forget Home Insurance After Your Renovation
Once your renovations are complete, it’s important to review your home insurance policy. The improvements you’ve made can change the value of your home, and your existing insurance may no longer provide adequate coverage. We can help you update your home insurance to ensure that your newly renovated property is fully protected against unforeseen events such as fire, theft, or damage.
Protect Your Family with the Right Life Insurance
Along with updating your home insurance, it’s crucial to ensure that you have the correct life insurance in place, especially after borrowing extra on your mortgage. Life insurance can provide peace of mind, knowing that your loved ones would be financially protected in the event of your passing.
At My Finance Friend, we offer tailored life insurance policies that provide financial security for your family, ensuring they can continue living in your home without the burden of mortgage repayments.
Let Us Help You Get Started
If you’re considering borrowing extra on your mortgage to fund home renovations, don’t hesitate to get in touch with My Finance Friend today. We’re here to offer expert advice on additional borrowing, remortgaging options, and insurance needs, ensuring that you can confidently turn your renovation dreams into reality while protecting your home and family.
By choosing My Finance Friend, you’ll benefit from expert advice, access to exclusive deals, and personalised guidance every step of the way—from borrowing extra for your renovation to ensuring you have the right insurance in place once your project is complete.
