Loans for home improvements

Unless you qualify for a grant to help with the cost of home improvements (such as for energy efficiency or housing renovation), you will have to pay for them yourself. 

If you have savings, you may be able to afford to pay for minor improvements. But for bigger improvements - such as installing central heating, improving your kitchen or building an extension - you may need to borrow money.  

The cheapest way to borrow for home improvements is usually to take out a "further advance" on your mortgage. This simply means that you increase your mortgage by the extra amount. The new total amount of the mortgage (including the further advance) will need to be less than the value of the house. You usually arrange to pay off the further advance over the remaining mortgage term - so if you take out a further advance one year into a 25-year mortgage, you would pay back the further advance over the remaining 24 years. But you can arrange to pay it back more quickly if you prefer.  

Taking out a "second mortgage" from a different lender is usually more expensive than getting a further advance. Taking out a personal loan is also more expensive. However, these options may be suitable if you cannot get a further advance on your mortgage.  

When you are buying a property, don't forget to factor in the cost of any improvements that you regard as essential to your initial budget. Otherwise, you may find that you can afford to buy the house but not to make the necessary improvements.