Financing an extension - best option?

Hi, I'm looking for some advice as to how best to fund a small extension. We've been quoted €17k for a block/glass extension (10ft * 18ft), no major structural work/steel beams etc... required...

Ideally we'd love to tradeup but like a lot of people that's just not an option anymore.

We're currently on a tracker with UB (ECB +1.15), we're 5.5yrs into a 30yr term, current LTV: 87%. Should we approach them for a top-up or should we try getting a personal loan from a bank or try the credit union?

Would UB even consider a topup or would they try to get us off our tracker in order to do so?

We're currently paying an extra €400pm off the mortgage, which we will be stopping this month and either putting into a savings account or against a loan for the extension.

Thanks.

You need to consider properly insulating your extension, not get quotes from the first traditional builder who offers to do work.

You also need to ensure that ventilation is right for this kind of structure.

Parts L and K of the building regulations refer and you can download them here;

http://www.environ.ie/en/TGD/

If your builder has no clue, avoid him.

If you have no one to certify the work appointed, think again - you will need to sell at some stage.

As this is mainly financial I have referred it to the mods in case it should be posted to another forum.

ONQ.

[broken link removed]

All advice on AAM is remote from the situation and cannot be relied upon as a defence or support - in and of itself - should legal action be taken.
Competent legal and building professionals should be asked to advise in Real Life with rights to inspect and issue reports on the matters at hand.

17k for 10x18ft glass & block extension ???

I say shop around it's not 2006 prices anymore .

Thanks for the input so far, we haven't finished getting quotes yet, some of the others have ranged from €27k - €33k from sunroom/conservatory companies - hence we're now looking for builders to quote!

But the question remains, for this type of project what is the best way of financing it? Long term via a mortgage topup (if that's possible?) or short-term via a personal or credit union loan?

Thanks!

financially it depends how long is left on your mortgage, your mortgage rate, and the rate you would be offered on any loan. a mortgage top up may seem cheaper, as it would likely be a much lower monthly commitment, but if you have 15 years left on your mortgage then remember that you will be paying interest on those funds for the next 15 years, which would amount to a considerable hike to the amount you pay back overall. no idea if ub would let you have a top-up on a tracker though...

try doing a few calculations on the loan calculator on itsyourmoney.ie (no affiliation)

for example, a personal loan of €20000 over 5 years at 12% (rough average) is €438.71 a month and would cost €6322.84 in interest.

the same amount over 15 years at 5% as a guesstimate for a mortgage top-up would cost you €157 a month, but cost €8260.75 in interest, so you pay more in the long-run, but considerably less a month.

all in all depends on your personal financial situation really...

Thanks hfp, you've answered my question!

droileen said:

What ever you do - do not allow your Bank to make any change to your Tracker Mortgage - instead arrange a No. 2 Mortgage with them, the repayments would normally be over the same unexpired term of your existing mortgage (or a shorter term, if you prefer). There is a massive difference between mortgage interest rates & personal finance rates - so go for the mortgage every time.

Click to expand...

+1.

If the word "tracker" comes into the discussion with the Bank ..walk away !