How To Remortgage For Home Improvements

Your home should work for you, not the other way around. Whether you need more space, a modern kitchen, or a new bathroom, home improvements can make all the difference. But big projects come with big costs. If you don’t have savings to cover it, remortgaging could be a smart way to fund renovations without relying on high-interest loans or credit cards. 

This guide breaks down everything you need to know to help you decide if remortgaging for home improvements is the right move for you.

Can You Remortgage for Home Improvements?

Yes, you can! Many homeowners remortgage to release equity from their property and fund renovations. If your home’s value has increased since you took out your mortgage, or if you’ve paid off a chunk of it, you may be able to borrow more. 

The main considerations will be whether you can afford the new repayments and if the planned improvements will add value to your home.

How Does It Work?

Remortgaging for home improvements means replacing your current mortgage with a new one for a higher amount. This additional borrowing provides the lump sum you need to cover renovation costs. 

Sounds pretty straightforward, right? Well, as long as you follow certain steps in the remortgage process, then it should be. Here’s how it works:

1. Check your equity – Your home’s equity is the difference between its market value and the outstanding mortgage balance. The more equity you have in your home, the more you can borrow.

2. Work out the renovation costs - Get at least two or three quotes for the work required so you have a strong indication of what to budget for and how much extra money you’ll need to borrow for the renovations. 

3. Apply for planning permission - This should only be required for major renovations or extensions, but it’s wise to check with your local council in case it’s needed. 

4. Find the best mortgage deal – You can either stay with your current lender or switch to a new provider offering better terms. Take the opportunity to compare rates and terms from different lenders to see what works for you.

5. Apply for the new mortgage – You’ll need to submit documents like payslips, bank statements, and proof of ID.

6. Affordability checks – Lenders will assess your income, expenses, and credit history to ensure you can manage the increased monthly repayments.

7. Property valuation – A lender may want to value your home to confirm how much equity is available.

8. Legal checks and paperwork – If you’re remortgaging with a new lender, a solicitor will handle the legal side, including transferring funds and updating lender details.

9. Finalise your remortgage – Once approved, your lender will release the additional funds for your project.

How Long Does It Take?

The remortgaging process typically takes 4 to 8 weeks, but it can vary depending on your lender and circumstances. If you’re staying with your current lender, the process may be quicker, sometimes just a few weeks. However, if you’re switching lenders, expect additional checks, paperwork, and legal work, which can extend the timeline.

What Will Mortgage Lenders Consider?

Lenders look at several factors before approving your remortgage:

• Equity – The more equity you have, the more you should be able to borrow. 

• Loan-to-value ratio (LTV) – Most lenders allow borrowing up to 80-90% of your home’s value, but some could offer up to 95% for home improvements.

• Credit score – A good credit history improves your chances of approval and qualifying for the most competitive interest rates.

• Affordability – Your income and outgoings need to show you can afford the new mortgage repayments.

• Purpose of improvements – Lenders prefer projects that increase your home’s value, such as extensions or general modernisation.

How Much Can You Borrow?

The amount you can borrow for this type of remortgage will vary from lender to lender, but will largely depend on:

• Your home’s equity – A higher amount of equity means more potential borrowing power.

• Lender criteria and maximum borrowing limits – Some lenders allow up to 95% LTV, while others could be more cautious.

• Your income – Most lenders will consider a mortgage amount equivalent to 4-5 times your annual salary, but this depends on your overall affordability.

For example, if your home is worth £300,000 and your mortgage balance is £150,000, you have £150,000 in equity. If a lender allows borrowing up to 90% LTV, you could potentially access a further £120,000 for home improvements.

In reality, you may not need as much as this for the work you have planned. That's why it’s important to have a good indication of the renovation costs in advance so you can set a budget and only borrow what’s required.  

Is It a Good Idea?

Remortgaging can be a great way to fund renovations, but it’s not always the right choice. The main advantage is that mortgage interest rates are generally lower than personal loans or credit cards, meaning lower monthly repayments. If your renovations add value to your home, you could also benefit from increased equity in the long run.

However, there are risks. Increasing your mortgage means you could pay more interest overall due to the length of the loan. If property values drop, you might end up in negative equity—owing more than your home is worth. There may also be early repayment charges or arrangement fees to consider if you’re switching lenders.

The key is to weigh up whether the long-term benefits of remortgaging outweigh the costs. A mortgage broker (like us!) can help you crunch the numbers and see if it’s the right option for you.

When Might It Be a Bad Idea?

• If you have low equity, as you may face higher LTV ratios and expensive mortgage deals.

• If you’re in a fixed-rate deal with high early repayment charges.

• If your credit score has dropped, making it harder to get a good interest rate.

• If your planned renovations won’t add significant value to your property.

Home Improvement Loan or Remortgage?

A home improvement loan is a type of personal loan and might be worth considering as an alternative to remortgaging if:

• You only need a small amount (under £25,000), as personal loans can be quicker and simpler to arrange.

• You prefer a shorter repayment term to avoid adding debt to your mortgage.

• You’re in a fixed-rate mortgage with high exit fees.

• You have limited equity, making remortgaging less viable.

What Other Options Are There?

If neither remortgaging nor a personal loan isn’t the right fit, there are other ways to fund home improvements, such as:

• *Second charge mortgage – A separate loan secured against your home, without changing your existing mortgage.

• *Equity release (for over 55s) – Access money from your home’s value with a lifetime mortgage.

• *Bridging loans – Short-term finance for urgent renovations before switching to a longer-term loan.

• Cash savings. If you have enough money to pay for your home improvements, this is the cheapest option, as you’ll avoid paying interest and other loan fees. 

Each option has its pros and cons, so it’s worth comparing them carefully before making a decision.

*This service is offered by referral to a third party

Is It Better to Remortgage After?

Remortgaging after you've completed the renovations can sometimes be a smarter move. If the work increases your home’s value, you could access a better mortgage deal with a lower LTV, leading to better interest rates and lower repayments. This approach works well if you have savings or another way to fund renovations upfront.