Borrow to upgrade home
Home improvement loans are a definite no go area. I think that home improvement loans are a false economy for the following reason.
Most home improvement loans are borrowed money, usually that either increase your mortgage balance or run along side it for the entire duration of the loan. Now then, lets do the sums, supposing for argument sake that you borrow ten thousand pounds.
This in theory adds, say twelve thousand pounds(£12000) to your home. Now that great if your going to sell up and move on to something bigger and better, but what if you don’t.
You will be paying a massive amount of interest on the initial borrowing, which will far outway your accumulation. Paying ten grand for twenty five years at even five percent interest is a massive amount.
Don’t do it unless you can afford to pay it back early, paying for a new kitchen for twenty years when It may only have an expected life span of 5 years is a mis-noma. Necessity should be giving in online saving as this will be the foundation of saving for a home upgrade.
