Re-financing for attic conversion..best way?

E

elki

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We currently have a mortgage of 210K on a house worth approx 450K. Thinking of putting in atic conversion for approx 23K. SSIA will yield 12k so we'd be borrowing 11K or so.

Does it make sense to top up mortage and pay this over the term of the mortage (25yrs) or does it make sense to borrow separately and pay back quicker? We've an option with our exisiting mortgage provider to pay back over 5 -10yrs if required.

My partner thinks paying over the lifetime of the mortage makes better sense but Im thinking of the extra interest we'd be paying by doing this. Any advice appreciated!
 
Topping up your mortgage for such a small amount (!) will prove very expensive if borrowed over a long term, even if the interest rate is lower than the same amount borrowed at higher rate for a shorter term. Suggest you try a few amortization tables - just google amortization tables - and it will show you how much you will pay back on capital plus interest. then go into a creditunion calculator such as : [broken link removed] and play around with it. Both of these methods should help you compare borrowing this amount over a short, medium and long term. i don't know which banks have loan calculators, but sure, it's a start!

regards,
 
Thanks triplex..thats my feeling too, that increasing the mortgage amt will result in a LOT more interest being paid back. I will google those tables..thanks a milion. Do all credit unions loan at the same rates?
 
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