Remortgaging To Release Equity 

What are the reasons for remortgaging to release equity?

It could be to do home improvements, such as an extension or just general cosmetic work. Some people buy properties that are run down and remortgage them to add value to the property with renovations.

Other common reasons people remortgage are to buy an investment property or even to gift money to their children to help them onto the property ladder.

People also choose to remortgage to pay off debts. It’s not uncommon to run into large debts for whatever reason – you may be able to remortgage to consolidate those debts. It could be to pay off an ex-partner. There are lots of different reasons we see across the board.

How do I remortgage to release equity in my property?

If you were to do it when your current fixed rate is ending, we help explore your situation in terms of looking at a new deal.

If you need to raise extra money at the same time, we can look to incorporate that into your new mortgage. We’d look at the whole of the market for the best lender for your situation.

If you were to take the other option, where you approach your current lender for a further advance, we help you explore those options too. Either way, we will find and explain the options and then put in your application.

How easy is it to remortgage to release equity?

It really depends on a few different factors. With any mortgage, whether you’re releasing equity, buying a property or just remortgaging in general, it’s all down to lenders’ criteria.

It also depends on whether you’re midway through a fixed rate, and the amount of equity you’ve got in your property.

A lot of people are under the assumption that you can take as much money as you want out of your property once you own it. But most lenders will only go up to 90% or 95% of the value of your property with a mortgage.

Lots of different factors are involved, including assessing your income and expenditure to meet the criteria and raise the money you need.

How long does it take to remortgage to release equity?

People usually want the money as quickly as they can, but it depends at which point you do it. If you were looking at borrowing the extra money when renewing your deal, lenders typically release that money when your new mortgage starts.

You can look at a remortgage up to six months before your deal finishes, and perhaps lock in a rate. This was very relevant last year, when rates were going up. They have nicely come down now, which is good, and they are more settled [podcast recorded in November 2024].

In terms of timescales, it really depends on where in the process you are. You get the money once your new deal starts. You could lock in for six months, but you would have to wait for that time to go by. If it’s for a home renovation project and you’ve got to get your builder and planning done anyway, that might work.

Whereas, if you approach your current provider for a further advance, they can release it to you in just a few weeks. You haven’t got to wait for your existing mortgage deal to finish because it’s an add-on, separate to the mortgage.

On a remortgage, if you are at the end of your fixed deal, we probably could do it in three weeks upwards, but on average it will take four or five weeks.

How much can I remortgage to release equity?

It really depends on two factors. First is the amount of equity you have in the property, which will determine how much you can borrow. As I mentioned, lenders will allow you to capital raise up to 90% or 95% of the property value – so it depends on the size of your mortgage and how much the property is worth.

But you also need to meet the lenders’ affordability calculations based on your income and expenditure, to show you’re able to meet the new monthly repayments.

What else do we need to know about remortgaging to release equity?

The main advantage of a mortgage broker is we’ll be looking at all the lenders and all the options available for you. Mortgage rates and lenders change all the time and it’s always important to make sure you’ve got the best deal you can.

Using a mortgage broker just ensures we’re exploring all the options for your circumstances. We match that with the best rates and products available to ensure you’re getting the most competitive deal.

We also make sure you’ve thought through your numbers. Doing an extension can be a bit more expensive than you might think. We can help look at your quotes and plan ahead – because it’s best not to raise too little, or too much. A good broker will talk you through what you need, why you need it and how to make that plan work for you.

YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

MOST BUY TO LET MORTGAGES ARE NOT REGULATED BY THE FINANCIAL CONDUCT AUTHORITY.

YOU MAY HAVE TO PAY AN EARLY REPAYMENT CHARGE TO YOUR EXISTING LENDER IF YOU REMORTGAGE

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME.

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