The ins and outs of financing YOUR home extension

If you are considering a new extension at your place – and if you are, Mint is pleased to help of course – THE key matter is to be aware of the cost implications to ensure your extension enhances your life at home without causing any long lasting financial ‘anx’!

Ten things to consider from our good friends at

1. Be aware there are many variables that will affect the cost of your extension such as soil type (which impacts the foundations); whether you are building a single or two storey extension; what the extension will be used for; and how much glazing you plan to specify.

2. Depending where you are in the UK, for a straightforward extension you should allow around £1,500–2,000/m² and of that the standard of specification you choose will have an enormous influence on the build cost.

3. Take note that a two storey extension will not cost that much more per square metre because, aside from the extra interior fixtures and finishes, you are only adding walls and floor joists. Of course, a roof and foundations are required whether your extension is single or two storey.

4. Balance the amount you are willing to spend on your extension with the estimated value it will add to your home.

5. When it comes to financing there are of course several options when it comes to borrowing money to finance your extension. However prudence is the watchword — if you borrow more than you need you might do unnecessary things in the course of the job and have difficulty paying it all back. So always be conservative.

6. In an ideal world, we would all finance our projects using our savings, but with recent times having offered poor interest rates, the financial landscape has been one that favours borrowers over savers. If you need to borrow the money, options might be:- an interest free Credit Card and if your extension is modest a personal loan for a project say up to £25,000. A Home Improvement re-mortgage loan is a way to go for larger projects

7. An accurate quotation of the total project fees and costs is always a must of course before you give the go-ahead for plans to be prepared.

8. Always check what any quote includes and check if any additional extras may emerge or also need to be considered.

9. VAT is zero-rated on new build in domestic properties including self builds, but this does not include extensions.

10. Insurance is important to cover all works during the extension build and your builder just covers the extension, so in the in the event of say for example a fire, which destroys the extension at any point in the build the builders is covered to start again and rebuild the extension. Always ensure you are adequately protected during your extension works .

You may also need to consider a 10 year structural warranty on the new extension works. Extension insurance needs to be in place from the moment you plan to start works on the property and should continue to the point the project is completed and then taken into full use.