The work would cost £25,000 and we can afford to save about £500 a month towards itQ We currently have a mortgage of £122,000 and need to complete some home renovations costing £25,000. We can afford to save about £500 a month to put towards the house renovations but it would take us years to save. Would it be worth overpaying the mortgage and then borrowing the amount we need? Our fixed rate ends in January 2024. AWA You’ve lost me. I don’t understand why you would overpay your mortgage only to borrow it back at some point in the future. I’m also a little worried that because you have a fixed-rate deal there will be a limit – typically 10% of the outstanding loan – on how much you can overpay. In your case that means you could be limited to overpaying £12,200 this year but as that’s a bit more than twice the £500 a month you have going spare, you are unlikely to breach your lender’s limits. But as I said before, why would you want to overpay unless it’s because your current mortgage represents the maximum your lender is prepared to lend you. Continue reading…
Source : theguardian.com
Read more…Should we overpay the mortgage and borrow money for house renovations?
