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Home Extension Loan

Home extensions are big business in the UK, with more and more people opting to improve their existing properties rather than purchase somewhere new. The Guardian reported planning permission applications have risen every year since 2012 with 49,649 applications in 2016.

Reasons to extend your home

The reasons why people would want to extend their home are plentiful with some of the main ones including:

  • Changing lifestyles / growing family – This is a very common reason where additional space is needed for a growing family. Alternatively if you have become recently self-employed you may want to add an extension for an office or working space?
  • Adding value to your property – Another very popular reason people look to extend their home is to add value to it. By adding additional rooms you can increase the retail value of your property which can, in turn, increase the equity available in your property.
  • Avoid costs / hassle of moving – Moving house can be very stressful, especially if the move requires you to look for alternative schools for the kids or switching jobs. Also settling into an unfamiliar area surrounded by people you don’t know can also be difficult. However building an extension can help to avoid this problem and means you can stay somewhere that you love.
  • Utilise existing space – Home extensions can help you make better use of spaces you may already have within your house such as converting a loft which means you can add an additional bedroom and possible en suite in your home – further adding value to your property.

Whatever the reason that you may have to extend your property, Promise Money has over 2500 secured loan plans plus a massive choice of remortgages so we feel confident we can help you to get a secured loan or remortgage to suit you.

Popular Home Extensions

Most people who extend their homes are most likely to do one of three things.

Loft conversion – A loft is an area of a property which is most likely to be underused which can make an ideal addition giving you a new bedroom, office or games room.

Conservatory – Another extremely popular choice is a conservatory which allows you to enjoy your garden from comfort indoors. Most conservatory manufacturers do offer finance but this may not always be the best option so enquire online to Promise Money and we can help get a competitive free quote for your conservatory.

Extensions – There are also other ways to extend your property to create additional room such as a bigger kitchen or living room – the possibilities really are endless.

How to pay for your home extension

If you are looking to extend your home, raising finance for it can be tricky but there are many options available.

Remortgage / Further Advance

For most people looking to extend their home, their first port of call would be to try to get more money from their mortgage lender, either by asking for a further advance, or alternatively by asking the lender to offer a totally new mortgage. This option is a good choice for people who have seen their property prices rise as this will mean they have more equity so they can borrow more money.

Remortgaging is when you pay off your existing mortgage and swap to a new product either with your current lender or with a new lender. Both this and seeking a further advance are great ways to borrow more money at a comparatively lower rate than an unsecured loan. Also it allows you to review your situation and change your product to one which is better suited to your overall circumstances, which may have changed since you took out your first mortgage.

However there are fees attached to remortgages, which may counter any benefits you might get if you intend to remortgage to get a lower rate or to save money. Also the remortgage process can take a number of weeks to complete so you will need to be committed to see the process through. Finally, remortgages have far more stringent criteria and lenders will want to see proof of what the money is being used for, which can make processing times longer which could be problematic if you need the money urgently.

Secured Loan

An alternative option to a remortgage is a secured loan. A secured loan is when you have two mortgages on your property that you pay off at the same time. The advantage of this is if you have high penalties to settle your current mortgage, or have a great rate you don’t want to lose, then a secured loan could be the answer.

They can also be beneficial if for some other reason you are ineligible for mortgage finance, for example you are recently self-employed or have less than perfect credit or your property is in poor condition.

The disadvantage of both of these options is that they are secured on your home so you need to have some equity and your home is at risk if you don’t keep up the repayments.

Personal Loan

A personal loan is a form of unsecured finance which means if you don’t keep up repayments your property is not under threat. These are ideal if your home extension costs are comparatively small and/or your home doesn’t have enough equity to cover the costs. As these loans offer no security for the lender though, loan amounts are comparatively low with higher interest rates and furthermore they are often only available to people with good credit scores.

Credit Cards

Another option for raising finance is using credit cards. Though credit cards can be very expensive, if the project costs are modest and you repay in months not years, a credit card with a 0% introductory period could work. One other benefit is they may offer protection if goods are substandard.

Other considerations


When planning your home extension – you will need to consider if your extension or works need planning permission. This will prevent you from being asked to pay fines later on. Also you may require proof of planning permission when seeking finance for your home extension – especially if you are looking to remortgage or seek a further advance, where criteria is much more stringent.

Choosing the right person for the job

Of course as well as raising finance for the job, you also need to make sure you find the right person to do the job. We have all read horror stories of “cowboy builders” so it is important to make sure the trades people you use can do the job properly to ensure you don’t pay more further down the line for home repairs and that your extension lasts a lifetime.

Make sure to do plenty of research on the trades people you plan to use: check their names on the internet, or ask friends and family for recommendations. Good places to start online include as Checkatrade and Trustpilot. Also be sure to get quotes from more than one firm which you can potentially use to negotiate better prices.


Another consideration is the insurance situation both during and after your home extension has been completed.

Many people don’t realise that during a home extension (or home renovation), home insurance providers won’t cover the building. Therefore, during the works you will need to have site insurance to cover the existing building and the new works until they are finished.

Your tradesperson may say they have insurance but it is important to check their documents as the majority have liability cover, which will require you to prove fault in the event of a claim which could involve costly legal battles. Also the cover may not include natural events claims such as fire, flood or storm damage.

Furthermore, if you are vacating the property during the works, you may need unoccupied buildings insurance before you start which may be included as part of your site insurance policy.

Finally you should always notify your home insurance provider before the work starts and after it completes, as your policy may need to be amended once work is completed.

Promise Money has over 30 years experience in placing secured loan enquiries. Get started on the home of your dreams today by talking to one of our friendly and helpful advisers on 01902 585020.