Remortgaging for Home Improvements

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How does remortgaging for home improvements work?

Remortgaging for home improvements is the same as getting a normal mortgage – except you’re borrowing extra money for the purposes of improving your home. It could be a new kitchen, an extension or a loft conversion. It could even be a full house refurb like my neighbours are doing, their roof is just going on at the moment. You could do the driveway, landscape the garden – anything to improve your home, big or small.
Remortgaging for Home Improvements

Remortgaging for Home Improvements

Hemat Natha talks us through remortgaging for home improvements.

What do you need to have to remortgage for home improvements?

Specifically to get the mortgage, it’s everything we’ve been talking about in previous podcasts. Lenders will still want to know about your income, expenditure and make sure that your credit reports are pretty good.

Basically, we do an affordability assessment to let you know how much money you can borrow. The only additional question from the lender will be to understand the purpose of the funds. With some lenders, if the borrowing is over a certain amount they will ask for a schedule of works with costs, plus builders estimates.

The other key thing you will need is equity in your property; that is, the property value versus what you have outstanding on your current mortgage. This will be an important factor in whether you are able to take the money out of your home to fund the work.

Is it a good idea to remortgage for home improvements?

It’s up to the individuals who own the property, and what their plans are for the future. When someone comes and asks us about borrowing additional money, we ask them to think about a couple of factors – where are they in their current deal and are there any early repayment charges.

Then we ask, what’s the cost of those improvements? Could they afford another property rather than go through the home improvements? Someone might say that they need £75,000 for a side extension, and I haven’t had one customer in 10 years that hasn’t gone over budget. We always say that you should budget 10% to 15% extra because things always cost more than predicted. You might want that fancy tap or shower unit.

There is a lot to consider – will you need planning permission? What will it all cost? Will it add value to your property?  We’re here to ask all those questions and play devil’s advocate to help make sure you’re making the right decision. 

Speak To An Expert

It doesn’t cost anything for a chat, it’s free and we never charge a fee until we’ve got a mortgage offer. So pick up the phone and let us take it from there.

Are there any alternatives to remortgaging for home improvements?

Remortgaging essentially means moving your mortgage to another provider, either to switch to a better rate or to borrow more money. If the cost of improvements are below £25,000, it’s worth considering whether a personal loan is better for you. 

With interest rates a bit high, people are tending not to want to move, and improve their property instead. We can also organise second charges, or secured loans as well. 

So if you’re in the fortunate position of having a nice low five year fixed rate of 1.79%, for example, that expires in 2027, we could consider a second charge. You’d have your bulk of your loan on that low rate and we would organise you with a top up fund. That way you don’t need to break that rate and pay early repayment charges. 

We’ll explore all the options and work out what’s going to be the best option for you.

How much can you remortgage for home improvements?

There’s a limit to how much you can borrow against the property – you can’t borrow 100% of your property value, but you can certainly take it up to a 90% loan to value. 

This is reliant on you being able to afford the amount you’re borrowing. We’ll check that for you and do all the calculations. Again, you need to consider your budgets very carefully and hire professional contractors to do the work. Make sure you have a good buffer so that you’re not left with a home without a roof, or a kitchen without that special Bake Off oven.

What else should we consider when it comes to remortgaging for home improvements?

We just want to make sure that people are making the right choices for their circumstances. We’ll ask you what your plans are in two years’ time, and three years’ time. Is this your forever home? Are you looking to move closer to a school in the future? 

We also look at the return on the investment and if it matches with the lifestyle you want. That way you know you’ve made the right choice. We’ve helped lots of developer clients, so we know a lot about the budgeting aspect and the costs of home improvements. 

I haven’t improved my home just yet – I’m dreading it! But I’ve got several friends that have been through the process and, like I mentioned, my neighbour’s doing a four metre rear and side extension now. 

But my friends have had nightmares where they haven’t been in their homes for two years, because they didn’t get the right people to do it, or they’ve been constrained on budget etc. 

I don’t want to give people horror stories and put you off home improvements – do them! But we’ll help make sure you think about everything. There’s no cost to that – you’re just benefiting from our advice. We treat our customers like family to make sure you make the right decisions. 

So just pick up the phone, and we’ll guide you through. Sometimes we’ve had people that decided not to do the home improvements who have thanked us for that advice. 

Think carefully before securing other debts against your home. 

You may have to pay an early repayment charge to your existing lender if you remortgage.

Your home may be repossessed if you do not keep up with your mortgage repayments.  

Why us?

Our Approach

Personalised – there is no ‘one size fits all’ when it comes to property advice. Your needs are not the same as anyone else’s and nor is our advice. We spend time getting to know you and your motivation for purchasing a property. 

Choice – we’re a mortgage broker, so we have the widest possible range of options. 

Technology and expertise – we use a combination of cutting-edge tech and 35 years of good old-fashioned financial expertise to find the right loan for your circumstances. 

Efficient – we admit it, we’re a little bit obsessed with streamlining. Our inspiration is Formula One – did you know that in 1950 a pitstop took 67 seconds? Today it takes 2. The difference? Organisation, training, and tools. We’ve learned from that and have streamlined our processes to get you into your property faster and hassle-free. Our case studies speak for ourselves!