Remortgage for Home Improvements

Want to give your home a makeover without moving? Remortgaging for home improvements is one of the smartest ways UK homeowners unlock the equity they’ve built and turn their property dreams into reality.

Instead of dealing with expensive personal loans or raiding your savings, you can borrow against your home’s value at much lower interest rates. 

This guide walks you through everything you need to know about using a remortgage for home improvements, to fund renovations, extensions, or complete overhauls.

Why More Homeowners Are Remortgaging for Renovations?

Picture this: you’ve been paying your mortgage for years, slowly building equity in your property.

Your home might have increased in value, but you’re looking at your dated kitchen or small bedrooms and wondering how you’d ever afford to upgrade. 

Here’s the thing – millions of UK homeowners are in exactly your position. And increasingly, they’re using remortgaging as their answer.

Remortgage applications for home improvements have skyrocketed by 174% since 2019, with the average amount people are borrowing jumping from £52,209 to £65,267. 

More than half of all people who remortgage now are either settling debts from improvements they’ve already done or raising capital for upcoming projects.

What Exactly Is Remortgage for Home Improvements?

Let’s break this down into plain English. 

A remortgage is when you replace your current mortgage deal with a new one. Usually, it’s to get a better interest rate or switch lenders for a more competitive deal. 

But here’s where home improvements come in: when you remortgage, you can ask to borrow more than you currently owe.

Here’s a simple example: Say your home is worth £350,000 and you still owe £200,000 on your mortgage. 

You fancy a kitchen extension and a loft conversion that will cost £35,000. You could remortgage for a total of £235,000. 

You’d get the extra £35,000 released as capital to spend on your project, and your existing £200,000 mortgage would be rolled into the new deal.

The key advantage? That money is typically offered at much lower interest rates than personal loans or credit cards because the lender has your home as security. 

As of January 2025, you could remortgage at average rates of 4.89% for a two-year deal or 5.19% for a five-year deal, which are far cheaper than the typical 28% credit card rate.

How Much Can You Actually Borrow for Home Improvements?

Most lenders allow you to borrow up to 90% of your home’s value, with a minimum additional borrowing of £5,000.

Your exact amount depends on several factors:

Your home’s current value: The more your property is worth, the more you can borrow. Get a professional valuation done to see exactly what you’re working with.

How much equity you’ve built: Equity is the difference between what your home is worth and what you still owe on your mortgage. 

Every payment chips away at your mortgage, increasing your equity. If you bought during a property boom years ago, your home might be worth considerably more now.

Your loan-to-value ratio (LTV): This is just a fancy way of saying what percentage of your home’s value you’d be borrowing. Want to borrow more? 

You’ll likely get better rates if your LTV is lower (meaning you’re borrowing a smaller percentage of your home’s value).

Your income and affordability. Your lender needs to be convinced you can actually afford the repayments. 

They’ll look at your job situation, how much you earn, and your other outgoings like council tax, utilities, and other debts.

Benefits of Borrowing Extra On Mortgage for Renovations

1. Lower interest rates

This is the big one. Because a mortgage is secured against your home (the lender can take your property if you don’t pay), they offer much friendlier interest rates than unsecured loans.

You’re looking at around 4.89% versus 28% on a credit card. Over time, this difference is genuinely massive.

2. Flexible borrowing amounts

Unlike a personal loan, which locks you into a fixed amount, remortgaging lets you borrow what you actually need. 

Planning a £20,000 kitchen overhaul? Borrow exactly that. Considering a £45,000 loft conversion instead? You can adjust upwards.

3. Longer repayment terms

Your remortgage might extend over 20 or 25 years. This spreads the cost, making monthly payments much more manageable than a five-year personal loan. 

Just remember that paying over a longer period means more interest overall, so balance that against your budget.

4. Potential to increase your property value

Here’s where it gets really interesting. The right improvements don’t just make your home nicer to live in; they can genuinely boost its value. 

A loft conversion with an extra bedroom and bathroom can add as much as 24% to the value of a typical three-bedroom home – that’s roughly £65,700. 

An additional bedroom alone adds about 13% to a two-bedroom property’s value. Even a new bathroom chips in a 4% increase.

5. Improve your overall mortgage deal

When you remortgage, you’re not just borrowing more. You’re also getting a chance to review your entire mortgage situation. 

You might find a better rate than you’re currently paying, switch to a lender with features you prefer, or move to a mortgage product that lets you make overpayments without penalties.

Connect with the mortgage advisors we work with, and they can help you get the best deal.

6. Avoid moving costs

Stamp Duty, estate agent fees, surveyor costs, and legal fees can easily add up to £5,000 or more when you move house. Remortgaging to improve your current home saves you from all of that.

How to Get A Home Improvement Mortgage: Step-by-Step Guide

Step 1: Work out your budget

Get quotes from builders and contractors. Factor in everything, such as materials, labour, planning permission, building regulations, VAT, and contingency (because projects always seem to cost a bit more than expected).

Step 2: Find out how much you can borrow

Use our free UK mortgage calculators or speak to a mortgage advisor to find the right number. 

They’ll give you an estimate based on your home’s value, what you owe, and your financial situation. This tells you whether your plans are realistic or if you need to scale back.

Step 3: Check your current mortgage terms

If you’re still within a fixed-rate deal, you might face early repayment charges (more on that in a moment). Make sure you know what these are before proceeding.

Step 4: Shop around for remortgage deals

You can remortgage with your current lender (sometimes called a product transfer) or switch to a new one. 

Most people get better rates by switching, but it’s worth checking what your current lender offers first.

This is where a mortgage advisor becomes invaluable, as they have access to deals from across the market and do the legwork for you. Connect now for more details.

Step 5: Get a property valuation

Your new lender will order a valuation to confirm your home’s value. This protects them (and you) and determines exactly how much you can borrow.

Step 6: Submit your application

You’ll need to provide payslips, bank statements, proof of employment, and details about your current mortgage. It sounds like a lot of paperwork, but it’s standard stuff.

Step 7: Wait for the underwriting process

This is where the lender does its detailed checks. They’ll verify everything you’ve told them and make sure they’re comfortable lending you the money. 

This typically takes four to eight weeks if you’re switching lenders.

​Step 8: Receive your offer and arrange solicitors

Once approved, you’ll get a formal mortgage offer. You’ll need a solicitor to handle the legal side of things. 

They’ll carry out searches, review documents, and handle the paperwork.

Step 9: Exchange contracts and complete

This is when the actual money changes hands. Your old mortgage is paid off, your new one starts, and you receive your funds for the renovation work.

Step 10: Start your improvements

Finally, the fun part!

Remortgaging for home improvements makes genuine financial sense for most UK homeowners who have built up equity and have a solid plan for how they want to use the funds.

It’s typically cheaper than personal loans, more flexible than credit cards, and lets you spread costs over a longer period.

Alternative Ways to Fund Home Improvements

Remortgaging isn’t your only option if you want to borrow extra for home improvements. Here are some alternatives:

Personal loans

These are unsecured, so they don’t put your home at risk. However, they typically charge higher interest rates (8-10%) and are usually only available for smaller amounts, up to around £25,000. They’re typically good for projects under £15,000.

Credit cards (less recommended)

For smaller projects under £5,000, a 0% balance transfer card could work well if you can pay it off during the interest-free period. Just don’t overspend – you’d face hefty interest after the promotional period ends.

Using savings

If you’ve got money set aside, this eliminates borrowing costs entirely. The downside is you lose interest you’d earn on those savings, and you’re left without a financial cushion for emergencies.

Further advances

Some lenders let you borrow more against your existing mortgage without fully remortgaging. This can be quicker and might involve fewer fees, though rates can be less competitive.

Second charge mortgages

You take out a second charge mortgage against your property’s equity. These are typically more expensive than remortgaging and more complicated, but they can work if your current lender won’t let you borrow more.

Government grants

For energy-efficiency improvements (insulation, boilers, heat pumps), government schemes are sometimes available. For disability adaptations, there’s the Disabled Facilities Grant.

For most people planning substantial improvements (over £20,000), remortgaging offers the best rates and most flexibility. For smaller projects, a personal loan or using savings might make more sense.

We highly recommend using a mortgage advisor to avoid wasting time on applications that won’t work for you.