Can you remortgage to fund home improvements?

More and more homeowners are looking at ways that they can fund home improvements and renovation projects on their current home and one way of doing so could be remortgaging.

There is a number of options that you can choose to fund your home improvements such as a bridging loan, further advances and equity releases. However, in this article we will be looking at remortgaging.

What is a remortgage?

Remortgaging is when you repay your old mortgage by taking out a new one on the same property. There are various reasons why people do this such as to save on their monthly outgoings, borrow more money to make home improvements or because their current product is due to end.

The process of remortgaging is moving to another lender or switching your current mortgage with your current lender to another product.

Remortgaging to make home improvements

If you’re thinking about remortgaging to complete some home improvements, there are various factors that will have a bearing on your ability to refinance your property:

  • The value of your home
  • The size of your mortgage
  • Your repayment history
  • The extent of the renovation (what your renovation plans are)

What is there to consider when remortgaging to fund home improvements?

Your financial situation

Your financial situation will be reassessed – lenders will look at your income, employment status, job security, debt and credit history.

As you will be borrowing more money and you will have a larger financial commitment, you need to think about how it will impact the rest of your finances.

Your payment history on your existing mortgage

If you have a track history record of late or missed payments, it may well result in most lenders turning you down.

If you have had payment issues in the past, some lenders will still accept you however most likely at a higher rate.


If you increase your mortgage loan, then it’s likely that your monthly payments will also rise. A lender will check if you can afford the new monthly payment – they will check if your income is high enough to cover your new payment alongside your outgoings.

Your renovation plans

Lenders will want to know that your home is still habitable. So if you’re planning on extending your property, they will want to know that it will be weatherproof and whatever your plans may be, they will want to know that there will be a working kitchen and bathroom.

If you’re planning on a demolish and rebuild project, you are going to need a specialist lender who offers products such as a bridging loan or a specialist renovation mortgage. These types of finance products typically have a higher interest rate than your more standard mortgage. However, a bridge loan will be over a shorter term such as 12 months therefore, you will only be paying for it for a shorter period of time.

Should you remortgage before or after the home improvements?

Most homeowners choose to remortgage to receive the funds to carry out home repairs. But if you have savings that you could use to pay for your home improvements, remortgaging afterwards could work to your advantage. A rise in your property’s value may give you access to better interest rates.

If your current product isn’t due to expire yet, you will need to check what your early repayment charges are. It might be worth waiting for your current product to expire to avoid large penalties.

Whilst another option could be a further advance, this is when is when you take on more borrowing from your current mortgage. A further advance could enable quicker access to funds without incurring any penalties.

 Think carefully before securing debt against your home as you may end up paying more in the long term.

What are the benefits of remortgaging for home improvements?

  • Mortgage rates are usually cheaper than a personal loan, making it cheaper to borrow
  • You can fix your monthly repayments for a longer period of time, in some cases over decades
  • There is a large panel of lenders available dependant on your credit rating
  • If your existing mortgage deal is coming to an end – you can remortgage penalty free, possibly on to a cheaper rate than a personal loan

Tips on how to reduce your renovation costs

When it comes to renovating, there is a few steps that you can take to make sure you don’t go over your budget and prevent you from overspending:

  • Set your spending limit before your start your project
  • Breakdown the costs of your project by materials and labour to make sure it’s realistic
  • Factor in an extra 10% in case it costs more than expected
  • Get three quotes for each job
  • If it’s possible, use any existing fittings to keep costs down
  • Keep an eye out for second hand tools and furniture
  • Are there any areas of the project that you could do yourself such as removals and painting?
If you would like to find out more about remortgaging your existing mortgage for home improvements or just because your existing term is coming to an end, get in touch with our team today. Call us on 01270 443510 or complete our enquiry form. You could potentially secure a rate up to three months before your current product is due to end.