Home improvements can cut mortgage interest rates, journalist writes

A fresh coat of paint, a new kitchen worktop or landscaping the garden can all help homeowners reap the benefits of the housing boom, without needing to move, according to a finance journalist.

Writing for thisismoney.co.uk, Neil Simpson asserts that carrying out some simple home improvements can affect a property’s loan-to-value (LTV) rating and offer home-owners some significant savings. The current property ‘boom’ has resulted in the availability of some very attractive remortgage deals for those with a lower LTV (mortgage divided by value) percentage.

Achieving a lower LVT status can be done in two ways, said Simpson. The first is to reduce the mortgage balance by paying off a lump sum, the other is to undertake some DIY to increase the property’s value: “Simple home improvements can make a big difference,” he added.

Arguably the kitchen is the most closely-scrutinised room in the house, yet is also the one with biggest scope for improvement and consequently, can add a lot of value. Therefore it is worth paying attention to the cupboards, lighting, flooring and walls, modernising and cleaning where necessary.

Those that want to make a longer-lasting improvement might like to think about granite worktops as a replacement for worn or out-of-date formica, wood or plastic alternatives. Granite is always a show-stopping addition to any kitchen.

Simpson continued that the financial implications associated with lower and higher LTV mortgage can be a difference of several hundred pounds per month. A case in point, says bbb-news.com, is the Edlins, a young married couple from Nottingham. Their home improvements enabled them to reduce their LVT and cut a resultant half a percentage point from their interest rate.

An LTV that falls on the “right side of the line”, he writes, “dramatically increases your choice of [remortgage] lender and rates.”