Are you dreaming of transforming your home into your dream abode?
Whether that’s by improving the layout of your current home or purchasing a house with huge potential to improve, we can help you to understand the different mortgage options to finance your project and advise you on which option will suit you best.
Dream Home. What are the main mortgage options?
Conventional mortgage
- Borrow up to 95% of your home’s current value.
- Lender does not consider the future value after the work is complete.
- Best for homeowners with sufficient equity in their home.
The 2 examples below are for someone who wants to borrow at least £100,000 for a 2 storey extension with a home worth £300,000 now:
Example One (who this option may suit):
| Current value of home: | £300,000 |
| Maximum allowed (95% of value): | £285,000 |
| Current mortgage balance: | £100,000 |
| Funds available: | £185,000 (up to) |
Example Two (who this option does not suit):
| Current value of home: | £300,000 |
| Maximum allowed (95% of value): | £285,000 |
| Current mortgage balance: | £220,000 |
| Funds available: | £65,000 (up to) |
Major renovation mortgage
- Lender considers future home value post-renovation.
- Funds released in stages, similar to a self-build mortgage.
- Suitable for larger projects with significant value increase potential.
Example:
Future home value is estimated at £400,000. This would allow the person in example 2 above to borrow an increased amount.
Dream Home. What happens when the work is complete?
With either mortgage type, at your next mortgage review, we can advise you on the appropriate remortgage option to take advantage of the new, increased value of your home.
In summary
Financing your home improvements doesn’t have to be daunting. By understanding your mortgage options and working with our trusted advisers, you can unlock the full potential of your property. If you need further information or personalised advice, don’t hesitate to book a call with us. Let’s make your dream home a reality!
Your home may be repossessed if you do not keep up repayments on your mortgage
Blog written 28/01/2025
The information contained within this blog was correct at the time of publication (28/01/2025), and is subject to change.
