Remortgage for Home Improvements

You might have heard the term “remortgage” before without really knowing what it means — you wouldn’t be alone. Here’s what you need to know, with a specific focus on remortgaging to fund home improvements.

Adding a new bathroom, kitchen, or extension can make a property feel brand new, no matter how long you’ve lived there. Renovating often works out cheaper than moving, but it still needs funding — and with competitive remortgaging rates currently available, there are plenty of options to help pay for it. How much you need to borrow will depend on the size of the job, and when done well, home improvements can genuinely add value and increase your property’s price.

What Is a Remortgage?

A remortgage is the process of paying off one mortgage with a new one, using the same property as security. It’s a bit like shopping around for a better deal on your phone or broadband contract — you look at what’s available, and if there’s a better rate out there, you switch. In mortgage terms, that switch is called remortgaging.

You can either find a new lender or switch to a better deal with your current one — it’s entirely up to you, and it’s worth doing your research into what’s genuinely the best option before committing. Speak to one of our advisors and we’ll scan the market on your behalf.

Who Can Remortgage?

Anyone with an existing mortgage should be able to remortgage their home, though what’s actually available to you will depend on the deals you find — you may be able to secure something cheaper with a different lender than staying put.

You can remortgage at any time, but it’s worth checking your existing mortgage terms and any fees or penalties for remortgaging outside your rate’s expiration window. As a general rule, it’s best practice to speak to us around 4–6 months ahead of your current rate expiring.

Why Do People Remortgage for Home Improvements?

People remortgage for all sorts of reasons — finding a better deal, moving from interest-only to repayment, wanting to make overpayments, or simply needing to borrow more. Home improvements, though, are one of the most common reasons of all.

When remortgaging for home improvements, most people are looking to release equity — the difference between your current mortgage balance and your property’s value — to fund anything from a new kitchen or bathroom through to a full loft conversion or extension.

How much equity you release depends on how much you actually need for the work involved. It’s worth knowing upfront that most lenders won’t let you release all the equity in your home, so it’s not a blank cheque.

How Do I Arrange a Remortgage for Home Improvements?

If you’re considering this route, it’s worth speaking to an experienced mortgage broker. We can review your current monthly repayments, scan the market for suitable lenders and products, and come back with the most appropriate deal available to you.

Bear in mind that remortgaging increases the amount of borrowing secured against your home, and your monthly payments could increase over the life of the mortgage. For example, if you have £100,000 remaining on your current mortgage and need £50,000 for improvements, you’d be looking for a lender willing to offer £150,000 in total.

How Does the Process Work?

The process typically follows these steps:

1. Agreement in principle. This gives you an early indication of whether a lender is willing to lend, without a full credit check. It’s not a guarantee of acceptance, but it’s a useful early signal.
2. Provide your personal and financial information. Lenders need this to put together a suitable new plan — your TMS mortgage broker can talk you through exactly what’s needed.
3. Full credit check and confirmation. Similar to taking out a mortgage in the first place, the lender will verify what you’ve provided.
4. Solicitor handles the transfer. A solicitor manages the switch from your old mortgage to the new one, and once that’s complete, your new deal is in place.

If you’re thinking about remortgaging to fund home improvements, get in touch today for a free, no-obligation conversation about what’s realistic for your situation.