Newspaper article The Evening Standard (London, England)

My Resistance Is Low; with Lending Rates So Cheap, This Could Be a Great Time to Invest in Major Home Improvements, Says Toby Walne

Newspaper article The Evening Standard (London, England)

My Resistance Is Low; with Lending Rates So Cheap, This Could Be a Great Time to Invest in Major Home Improvements, Says Toby Walne

Article excerpt

Byline: TOBY WALNE

WHY not beat the winter blues by brightening up your home with a nice set of skylight windows?

Or, if you really want to push the boat out, you could opt for a conservatory extension. If that doesn't turn you on, then what about a complete revamp of the kitchen?

Thanks to continuing low interest rates, the cost of borrowing extra cash to finance major home improvements has been comparatively cheap for some time.

Now, for many people, loan deals are cheaper than ever.

Whether you wish to take out an unsecured loan that does not burden the mortgage or add to existing borrowings, this could be a great time to take the plunge.

Samantha Owen, head of research for data collector Moneyfacts, believes unsecured loans - typically taken out over five years - can be ideal for home improvements for amounts up to [pounds sterling]25,000.

But she warns that it is worth considering bolt-on insurance to help you cover the repayments in a crisis, and the price of this can influence your choice of lender just as much as a good headline lending rate.

Owen says: "Unsecured loans mean lenders have no claim on your home even if you get into repayment problems - but bailiffs can still knock on your door.

"Therefore, also consider payment protection plan insurance just in case you fall unexpectedly ill or lose a job and have difficulty keeping up payments."

Moneyback Bank offers one of the most competitive rates, at 5.7 per cent APR, which works out at [pounds sterling]287 a month for a [pounds sterling]15,000 loan over five years.

However, sign up for its additional payment protection insurance and the charges rise steeply to [pounds sterling]346 a month.

Northern Rock, the Post Office and the AA all charge 5.8 per cent APR on unsecured loans, working out at about [pounds sterling]290 a month to borrow [pounds sterling]15,000 over five years.

However, if you decide to take out additional insurance the Post Office offers the best value of all charging a total of [pounds sterling]339 a month.

Two other top deals are by Alliance & Leicester and Leeds Building Society, with interest of 6.1 per cent and 6.9 per cent respectively, working out at [pounds sterling]290 and [pounds sterling]295 a month for a five-year loan of [pounds sterling]15,000.

By comparison, Leeds Building Society offers one of the most competitive bolt-on insurance deals on the market, bringing total charges to [pounds sterling]330 a month - beating lower APR deals.

Of course the cheapest way to borrow money for home improvements, of course, is to remortgage or take out a further advance on your home.

But, although rates tend to be cheaper, repayments are made over many years so can end up being more expensive.

In addition, the home is used as security for repayments, so if you fail to pay the bills, you could potentially lose your home. …

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