Remortgage for Home Improvements

Q: Can I remortgage mid fix?

Remortgaging mid fix means leaving your current fixed rate early, which usually triggers early repayment charges. These charges can be significant, often between one and five percent of the outstanding balance. In most cases it makes more financial sense to wait until your fixed rate ends. If you need funds sooner, a further advance from your current lender is often a better option as it avoids those charges.

Your Remortgage Options

How Much Can You Borrow?

The maximum depends on what the home is worth now, what you still owe, your income, and each lender's loan to value limits. Most will go to 80 or 85 percent. As a rough guide, if the home is worth 300,000 pounds and the mortgage is 150,000 pounds, there is potentially 90,000 to 105,000 pounds of borrowing available before affordability rules are applied. Your credit report matters too, because a clean file opens up the better remortgage deals.

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Some renovations genuinely add more value than they cost. Loft conversions, rear extensions and serious kitchen and bathroom upgrades tend to perform well, which means the money you borrow may be partly recovered in what the home is worth afterwards. Ask a local estate agent before you commit to major work.

Lenders will ask about the purpose of any additional borrowing. Home improvements are a widely accepted purpose for equity release, though some lenders have limits on how much they will lend above the existing mortgage for this purpose. We know which lenders are most flexible and will match you to the right one for your project size.Where the money is for something other than renovations, the rules differ again, so it is worth reading about releasing equity and debt consolidation before you decide.

Planning permission is not needed for every job. Work inside permitted development limits, internal remodelling and most kitchen or bathroom renovations need no council approval. Where your project does need it, make sure it is granted before you apply, because lenders will want to see the reference.

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If your current mortgage deal has not ended and you are still inside the early repayment charge window, we calculate whether the saving justifies switching early. Often it does not, and waiting a few months is the better answer. There are also legal fees and valuation fees to weigh, though many lenders now cover both, and we tell you which do.

We can arrange a remortgage specifically to fund home improvements alongside any other remortgage objectives. If you are also looking to get a better rate at the same time, we address both in one application.

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Because we are fee free on mortgages over 100,000 pounds and whole of market, we compare every suitable mortgage lender on your behalf. Our job is to find the combination of rate, lender and loan size that gets you the money you need at the lowest total cost.

For most homeowners, a remortgage is the most cost-effective way to fund significant home improvements. We will show you exactly what the new payment would be and what the total cost is over the term before you commit to anything.If you are also coming to the end of a fixed rate, read our wider guide to a fee free remortgage broker service, or the detail on what remortgaging costs.

Start the remortgage conversation before you instruct builders. Knowing how much you can release and at what cost lets you plan the project properly and avoid a gap between your mortgage completing and the work starting.If your credit history is not perfect, that does not rule you out; we cover it on our bad credit mortgage broker page.

Step by Step

What You Will Need

To start the conversation, have the following ready:

Your mortgage details

A rough idea of your current property value and outstanding mortgage balance

Your renovation plans

Details of the work you are planning, including rough costs if you have them

Planning permission

Planning permission reference if your project requires it

Proof of income

Your income details, including payslips, P60, or self-employed accounts

Bank statements

Three months of bank statements

Early repayment charges

Details of any early repayment charges on your existing mortgage deal

Get in touch for a free conversation. We will work out exactly how much you can release and what it will cost, so you can plan your project with confidence.

Some of the mortgage lenders we arrange additional borrowing with

Adviser tips

Three Things Worth Doing First

Three checks that save clients the most money before they borrow against the house.

Check the value first

If your property has risen in value, you can usually borrow more without the monthly repayments moving much, because a lower loan to value buys a better interest rate. If it has not moved, home renovations funded this way may not be worth it: your loan to value goes up, and if prices fall you could owe more than the house is worth. An estate agent valuation costs nothing and tells you where you stand.

Pick work that pays

Extensions are expensive, so look for renovations that add more to the value than they cost. An extra bedroom is reliably the best return, with an en suite the most prized of all. A large open plan kitchen diner or an extra bathroom also tend to do well. Energy efficient improvements such as insulation, a heat pump or solar panels increasingly matter to both buyers and mortgage lenders, and some lenders now offer better remortgage deals where you can evidence them.An extra bedroom returns the most.

Use a broker, not just your bank

Your existing lender wants to keep you and will offer you something, but nothing stops you shopping around. A broker reaches specialist lenders and rates that never appear on the high street, and if your equity has grown you may qualify for better deals than you expect. Ensure the comparison covers the whole market; ours is fee free on mortgages over 100,000 pounds.

Alternatives

Other Ways to Pay for Renovations

A remortgage is not the only route, and for smaller amounts it is often not the best one. A further advance from your existing mortgage lender adds the money you need to the loan you already have, with no new legal fees and usually no valuation fees. It is quicker, and it leaves a low existing rate untouched.Best for smaller amounts mid deal.

An unsecured personal loan suits renovation costs under about 25,000 pounds. The interest rate is higher but the term is short, so the total interest is often lower than spreading the same amount over twenty five years.Best under 25,000 pounds.

A secured loan sits behind your mortgage rather than replacing it. Secured lending costs more, but it matters in two situations: where early repayment charges make switching uneconomic, and where a poor credit score means your lender will not lend more. Specialist lenders here consider what the high street will not.Best where a remortgage is blocked.

We compare all of these alternatives against a remortgage on your own figures and tell you which wins. Ask us for that information before you commit to anything.

Remortgage for Home Improvements FAQs

How much equity do I need to remortgage for home improvements?

Most lenders require at least 15 to 25 percent equity remaining in your property after borrowing. For example, if your home is worth £300,000 and you owe £200,000, you have £100,000 of equity. Lenders will typically let you borrow up to 80 or 85 percent of the property value, which means you could potentially release up to £55,000 to £65,000 for home improvements.

Is a remortgage better than a personal loan for home improvements?

For significant home improvement projects, a remortgage usually offers a lower interest rate than an unsecured personal loan because the debt is secured against your property. However, you will be borrowing over a longer term, which increases the total interest paid. Your mortgage adviser will compare both options based on your current deal, any early repayment charges, and your project costs before making a recommendation.

How long does a remortgage take?

A full remortgage typically takes four to eight weeks from application to completion. If you are arranging a further advance with your existing lender, this can sometimes be faster. The timeline depends on how quickly solicitors can act and whether a new property valuation is required.

Will home improvements increase my property value?

Some improvements add more value than others. Loft conversions, extensions, and kitchen upgrades tend to give the best return. Energy efficiency improvements such as insulation and solar panels are increasingly valued by buyers and lenders. A local estate agent can give you an indication of the likely added value before you commit to borrowing.

Can I remortgage mid fix?

Remortgaging mid-fix means leaving your current fixed rate early, which usually triggers early repayment charges. These charges can be significant, often between one and five percent of the outstanding balance. In most cases it makes more financial sense to wait until your fixed rate ends. If you need funds sooner, a further advance from your current lender is often a better option as it avoids those charges.

Using Your Home to Fund Renovations