How to pay for home repairs

Mortgage money is tight and lenders are reluctant to make advances for non-essentials.  But one area where most lenders are amenable to requests for further borrowing is if you need to spend money on repairs to your property.  It is in the lenders’ interests to ensure that your home is kept in good repair.

Research from Saga, the over-50s organisation, shows that some 34% of householders over 50 say their house is in need of repair, with roofing most often in need of a fix. But when asked how they might pay for housing maintenance, one in seven say they cannot afford it, half said they would use savings and almost a third said they would turn to their regular income or pension. So if you come into this category, what can you do? 

Borrowing to fund repairs 

There are several possibilities.‘So far as borrowing for repairs is concerned it is nearly always cheapest to approach your existing lender first,’ says Ray Boulger of mortgage broker John Charcol.  ‘In the past they may have granted a further advance more or less automatically if you wanted only a small amount.  But today they will probably want you to prove your income and you will have to go through the same process as a full remortgage.  But most are willing to lend,’ says Boulger.

Although the income multiples formula has largely been replaced by affordability calculations, Boulger says that as a rough rule of thumb you ought to be able to borrow up to three and a half to four times income or joint income if you are both earning and he confirms that for older borrowers, pensions are taken into account.  But he warns that not many lenders will allow a mortgage to run beyond age 75.  ‘This is probably to do with the FSA which has a bee in its bonnet about lending into retirement,’ says Boulger.

Depending on how much you need to borrow and what you are paying on your current mortgage,  it might be better to go for a full remortgage with another lender if you are paying more than 3% or 4% for your money.   But be careful if you have a mortgage which is still within the period when early repayment penalties apply as this will probably make a remortgage uneconomic.

Also, for younger borrows who might find themselves coming up against the 60% loan to value limit, it might pay to borrow, say, the last £5,000 on a personal loan at around 7.9%, or put it on a credit card and do a 0% balance transfer, rather than remortgage for the full amount and pay a higher rate because the larger loan goes over 60%.