Should we save or borrow for our extension?

Chris Dale • July 16, 2025

Should we save or borrow for our extension? 

Like many, I am generally a saver rather than a borrower by default.

A client recently told us that they planned to delay their project, so that they could save the additional money they needed to be able to do the extension that they really wanted, rather than compromising. Wisely they had asked us to carry out a costing exercise, so they knew this and could assess the situation and plan for it.

In that instance they had £75,000 and needed save roughly another £25,000 to do what they wanted to do, which they thought they might be able to do over the course of 3-4 years.

Their question was actually when they should resume the process, which we answered and I suggested that they give themselves a year to be comfortable to get planning, building regulations and find themselves a builder (it’s always better to allow more time than less!).

However, it occurred to me that whilst saving rather than borrowing (in my mind at least) is an admirable and patient approach, it made me wonder what other factors should be considered.

COST OF BORROWING

The main one of these was inflation and the increase in materials, labour costs and fees.  Even taking a conservative 3-4% annual increase (realistically 4-7%), or a 10-15% increase over 4 years, on a build of £100,000, this would equate to increased costs of around £10,000-£15,000.


COST OF DELAYING

If we assume our client borrows £25,000, at 6% over 4 years, this equates to £3,200 in interest.


Based on this and some (reasonable?) assumptions and purely financially, it would make sense to borrow rather than save.

 

OTHER BENEFITS

Other factors to consider are:

-         Additional time the family will have in the improved property

-         Other things adversely affecting the viability of the project


This is obviously a very simplistic view and based on several assumptions. However, the aim of the blog is to highlight that in the same way that we try to think creatively about the designs we do for our clients, we will always try and offer general advice and guidance; we’re not just an office of architects, we’re an office of people with families, homes and mortgages. This helps us be better architects because we have better empathy, giving us a better understanding of how to help our clients projects be successful for whatever their specific requirements are.


If you have a project but are in two minds what to do, please do get in touch and we’d be delighted to discuss it with you.

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