Home Improvement Funding Without Disturbing a Low Fixed Rate
£65,000 · 10 years · 7.25% fixed. A homeowner in the North East wanted to fund a £65,000 loft conversion and extension.
The Client
Homeowner
The Challenge
A homeowner in the North East wanted to fund a £65,000 loft conversion and extension. Their existing first charge mortgage was on a five-year fixed rate at 2.15% with four years remaining and an early repayment charge of approximately £3,800. A remortgage would lose the favourable rate and incur the ERC.
Our Solution
Doulton placed a second charge mortgage of £65,000 behind the existing first charge. The first charge lender's consent was obtained within three working days. The second charge rate was higher than the first charge, but when blended with the retained 2.15% first charge, the effective overall borrowing cost was well below what a remortgage at current rates would have produced.
The Outcome
Loft conversion funded. First charge at 2.15% fully preserved. Blended overall mortgage cost substantially below current remortgage rates. ERC of £3,800 avoided. Extension completed and added estimated £90,000 to property value. Key highlights: 2.15% first charge mortgage fully preserved; ERC of £3,800 avoided by second charge approach; Extension added estimated £90,000 to property value.