Cheapest way to borrow 80k

Wonderer

Frequent Poster
Messages
20
Hi All

I wonder if you can offer advice in relation to my query

We have a mortgage with KBC - balance outstanding is 170k, on a tracker rate ( house value is approx 450k)

We are planning to renovate and extend another house that we bought three years ago that will become our family home. We have no mortgage on that other house. We are going to use savings to pay for the renovation and build but need an additional 80k to do it.

We were thinking of remortgaging. I phoned KBC today and they said that would be possible alright - though I think perhaps only if the house we're renovating is the current one on which we have the mortgage (not sure about that element). Anyway, the 80k, they said would be given to us at current market rates so w'd keep the existing 170k at tracker and the additional 80k at whatever the going rate is.
My question to you is.... is this the cheapest way for us to get the 80k? Any suggestions most welcome!

Thanks
 

RedOnion

Frequent Poster
Messages
3,549
In that case you should check with other banks as well, but a mortgage is the cheapest way to borrow funds.

You'll be taking out a mortgage on an unmortgaged property, so you'll have legal fees in doing so.

If KBC will do an equity release on existing mortgage it will save you the legal fees, but they might not be willing to do so.

You need to do some research on the tax relief that will be available on interest in future when you rent it out.
 

Buddyboy

Frequent Poster
Messages
565
Anyway, the 80k, they said would be given to us at current market rates so we'd keep the existing 170k at tracker and the additional 80k at whatever the going rate is.

If you go this route, make damn sure that that is what they do, not roll up the mortgages into one mortgage of 250 at the current rate. There is a thread here from someone that that happened to. I don't know if it is unusual, but thought I'd mention it.
 

Wonderer

Frequent Poster
Messages
20
In that case you should check with other banks as well, but a mortgage is the cheapest way to borrow funds.

You'll be taking out a mortgage on an unmortgaged property, so you'll have legal fees in doing so.

If KBC will do an equity release on existing mortgage it will save you the legal fees, but they might not be willing to do so.

You need to do some research on the tax relief that will be available on interest in future when you rent it out.
Ok thanks so much.
 

Wonderer

Frequent Poster
Messages
20
If you go this route, make damn sure that that is what they do, not roll up the mortgages into one mortgage of 250 at the current rate. There is a thread here from someone that that happened to. I don't know if it is unusual, but thought I'd mention it.
Afraid of that alright. I'll make sure to check properly. Thanks very much for caring!
 
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