5 Ways to Finance A House Extension

Whether it is a loft conversion, a basement renovation, an extension or building a conservatory, a home extension can be the answer to more space. But what are your options for financing it?

Savings

Improving your home can be expensive, but should you raid your savings to do so? The housing market is currently in an uncertain mood, which could make buying and selling your house a risky option. However, long-term trends show house prices continuing to increase. So transferring savings directly to your own property can be a beneficial way of ensuring the value of your house remains high, whilst also enjoying the direct benefits of your savings in the long term.

Personal Loan

A personal loan or even a home improvement loan can either be secured or unsecured against your property. For projects that cost less than £25,000 an unsecured personal loan is preferable. For young homeowners between the ages of 25-44, this is by far the most popular form of borrowing.

Remortgage

Remortgaging is another very popular and practical way to finance making your home bigger – and the potential increase in its value is a good reason for borrowing more. Of course, it’s all a question of getting the right deal and this is where a mortgage advisor like Trussle can be essential. With rates low and lenders keen for your business, you may not even see your monthly mortgage payments rise that much even with the additional borrowing.

Credit Card

Using credit cards instead of loans isn’t necessarily the most expensive option. Many credit card rates have low initial cash advance fees. When these deals come to an end there is often the option of transferring the balance to a 0% interest credit card deal. So long as you maintain the monthly repayments, your balance will decrease. This can be worth looking into as an alternative to an unsecured personal loan.

Family Borrowing

Of course, there may be the possibility of taking advantage of the much friendlier economic conditions that allowed your parents to buy and own their own homes. For many young professionals, an increasingly safer borrowing option is to ask for help from family. Previous generations are far more likely to have access to disposable wealth than first-time buyers do today, although this option relies on having an amicable relationship with family and trust and confidence in your ability to pay them back.

With borrowing rates remaining low, homeowners are increasingly looking to extend their own houses to create more space. But there are plenty of finance options to help them depending on the size of their renovation plans. Borrowers are achieving competitive low-interest deals and a housing culture that recognises the long term benefits of increasing your current house size. There’s always more than one way to make more room in your home, though, so it's worth exploring the options carefully before settling on one.