Equity release for home improvements

[FANADMAN]

I am thinking about looking for an equity release from our Mortgage.We bought the house 2 years and and has since increased in value by €120K approx.We 2 personal loans that were topped up to get deposit and car.
(17K and 23K)respectively.

We both have SSIAs contributing the maximun. I have an employee share scheme that after next year will not be liable to income tax. So it is worth holding on to avoid having to pay 42%.

We earn good salaries but we need to do some home improvements and spend some money on the house. Spare cash for that amount is hard to come by for the amount that we need to do. I could go back to bank and increase one of the personal loans but I am reluctant to do this as apr is approx 8% currently paying 2.85% mortgage.

I was thinking we could borrow an extra €50K on the mortgage. Our debt to value will still only be approx 80% I even worked it and I think we could reduce our mortgage by 3 years to 30 and save money.

Is this the best way to do this.?

SSIA are earmarked for something else with first maturing mid 2006 and the 2nd aug 2007.

 

[WizardDr]

The rate is attractive.
The term is longer.

You could always pay off lump sums when they arise.

Home equity finance just needs to be managed as what you want to avoid is long term financing for short term requirements. So if you started getting used to taking a slice off every so often it is a very useful structure.

You are vague about the SSIA. Not wishing to intrude, but unless whatever it is you are doing with it is going to generate a return, why not take it off mortgage and redraw at another stage?