Wednesday, December 20, 2006
Category:
Home Improvements
Bank holidays have had a long standing tradition of being a day for DIY jobs, and with the coming bank holidays, they are no exception.
New research conducted by moneysupermarket.com, the price comparison website, has explored whether taking out a low rate personal loan would be cheaper in the long run than remortgaging when financing DIY.
With such competitive rates available in the market, compared with a remortgage deal, and short repayment terms many homeowners prefer to take out loans.
Using examples found by moneysupermarket.com, for someone wanting to finance £10,000 worth of home improvements, the amount repayable could be £11,486.40 with a competitive personal loan at 5.7%APR over five years. However, by remortgaging homes for the same amount at 5.15% tracker for the term of the mortgage, not only is this loan secured against properties for a longer period, individuals could end up paying £2,888.40 more.
Richard Mason, director of personal loans at price comparison website, moneysupermarket.com said “The bank holiday weekend is a popular time for Brits to go DIY crazy and the money spent over this period is huge. With many homeowners waiting to see what happens to the housing market before selling or buying a home, DIY and home improvements will prove particularly popular again this year.”
Adding the cost of any home improvements to a mortgage can not only spread debt over a longer period, but also prove to be more costly in the long run.
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For homeowners looking to finance home improvements, taking out a personal loan at a competitive rate could be one option that would allow homeowners to finance their home improvements. Home improvements including an extension, loft conversion, new kitchen or
bathroom could all be completed with a personal loan.
