Remortgage to pay for home improvements

If you currently have a mortgage, or own your property outright, you can remortgage your home which means getting a new mortgage, either with your existing lender or a new one. Even if your current mortgage has a duration of 30 years or more, you don’t have to stay tied to the same one for that length of time.

Remortgaging is common and can help you to get a better deal and take advantage of good rates. You can see it as reevaluating your finances and finding the best deal to ensure you’re not paying more than you need to. Just like you might do with your utility bills.

How much equity is in your property, it’s current value and what kind of loan-to-value (LTV) percentage you want will all affect what kind of mortgage you can get. Working with an experienced, specialist remortgage broker (like us!) is the best way to make it simple and easy. Get started online.

This will depend on how much money you want to spend on your home improvements or renovation. 

Sometimes, you can get better mortgage rates through remortgaging than you could taking out a loan. So this can mean it’s a more effective and cheaper way to pay for your home improvements. But it will depend on what’s available to you at the time. 

It’s important to make sure you’re clear on what the best option is for you before you secure any debts against your home. So always speak to a specialist mortgage broker who can talk you through your options.

Once you’ve remortgaged, you can use your lump sum to fund any home improvements you’ve been planning, but it’s important to make sure you know how much it’ll cost you. Before making any decisions, work out an idea of how much the home improvements are going to set you back.

Get quotes from contractors and bear in mind additional costs such as planning permission, architect’s fees, VAT and any other costs that might apply to your project.

If you take out a secured loan, it means you’ll be using your home as the guarantee against the loan, the same as you do with your mortgage.

But when you remortgage, you’ll be arranging a new mortgage deal on your house and removing any equity as a lump sum, which you can use for your home improvements.

The main difference to note between the two choices is that if you remortgage, then all your payments will be to the same lender, which usually means that your repayments will be lower.

However, opting for a secured loan can often be easier to be approved for, so could be preferable if you have a bad credit rating.

If you have the funds to pay for your home improvements without remortgaging, you can absolutely do that and remortgage afterwards. 

Depending on what you want to do, the improvements might increase the value of your property. If you’re confident the work will increase the value, it could be a good idea to remortgage afterwards. That’s because the equity your property holds will increase and you should have access to good rates when you remortgage if the property value is higher. 

If you’re not sure if the property value will increase, or think the market could change, it could be better to remortgage before the work is done so you can take advantage of the current rates.

Read more in our Complete Remortgaging Guide.