How It Works, Costs & Eligibility
Many homeowners choose to remortgage to release equity for home improvements such as extensions, loft conversions, renovations or complete refurbishments. Remortgaging can be an efficient way to raise funds with competitive interest rates, especially compared to personal loans or credit cards.
This guide explains exactly how remortgaging for home improvements works, how much you may be able to raise, how lenders assess applications, and what to consider before you begin.
What Does It Mean to Remortgage for Home Improvements?
Remortgaging for home improvements involves switching your current mortgage to a new deal — usually with a different lender — and borrowing extra money at the same time. The additional funds come from the equity you’ve built up in your home.
Example:
- Current property value: £400,000
- Current mortgage balance: £220,000
- Equity: £180,000
- You remortgage to £260,000 → releasing £40,000 for improvements
This is known as “raising additional borrowing.”
What Types of Improvements Can You Remortgage For?
Most lenders allow additional borrowing for upgrades that add value or improve the long-term usability of the home, including:
- Extensions and loft conversions
- New kitchens or bathrooms
- Structural changes
- Garden rooms or office spaces
- Energy-efficient upgrades
- General renovations and repairs
Some lenders may request details, quotes or planning permission for large-scale projects.
How Much Can You Borrow for Home Improvements?
There are two main factors that determine how much you can raise:
- Your income and affordability
- Your property’s Loan-to-Value (LTV)
Lenders typically cap total borrowing at 85–90% LTV, depending on your profile and property type. To understand LTV bands, see our full guide: LTV Explained.
Example Borrowing Scenarios
Scenario 1 — Small Renovation
- Property value: £300,000
- Outstanding mortgage: £180,000
- Max LTV allowed: 85%
- 85% of £300,000 = £255,000
- Potential additional borrowing: £75,000
Scenario 2 — Large Extension
- Property value: £500,000
- Outstanding mortgage: £200,000
- Max LTV allowed: 90%
- 90% of £500,000 = £450,000
- Potential additional borrowing: £250,000
Actual offers depend on affordability and credit profile.
How Lenders Assess Remortgaging for Improvements
Lenders assess additional borrowing in the same way as a standard remortgage, with a few extra considerations. They will check:
- Income & outgoings
- Credit history
- Current mortgage status
- LTV and equity level
- Details of your planned improvements
For full timelines and process, see our guide: Remortgage Timeline.
Do You Need a Valuation?
Yes — almost all remortgages require a valuation, especially when raising additional borrowing. Lenders may use:
- Automated valuation model (AVM)
- Desktop valuation
- Full physical valuation (for larger works or unusual properties)
If the lender believes the planned works significantly affect value, they may ask for costings or planning documents.
Pros & Cons of Remortgaging for Home Improvements
Pros:
- Potentially lower rates than personal loans
- Can raise large sums if equity is strong
- May increase your property value
- Spread payments over the mortgage term
Cons:
- Higher mortgage balance
- Longer repayment period
- Possible Early Repayment Charges (ERCs) if your current product hasn’t ended
- Higher LTV may mean higher interest rates
To compare rates and timelines, see: Product Transfer vs Remortgage.
When Raising Funds Might Not Be Suitable
- If your LTV is already high (90%+)
- If your credit profile recently worsened
- If your income won’t support higher affordability
- If ERCs outweigh the benefit
Alternatives to Remortgaging for Improvements
- Second charge mortgage
- Further advance with your current lender
- Personal loan (for smaller works)
Each option has different costs, criteria and implications.
Will Renovations Increase Property Value?
Many improvements increase value significantly, such as:
- Extensions
- Loft conversions
- Kitchen upgrades
- Bathroom modernisation
Basic cosmetic improvements may not significantly affect valuation but can increase market appeal.
Next Steps
If you’re considering a remortgage to fund home improvements and need clarity on valuations, borrowing limits or lender criteria, we can connect you with FCA-regulated advisers who can assess your situation and explain your options.
You can also explore related guides such as LTV Explained or compare options in Product Transfer vs Remortgage.
All mortgage advice is provided by FCA-regulated advisers. Your home may be repossessed if you do not keep up repayments on your mortgage.
FAQs
Do I need planning permission for a remortgage? Not for the remortgage itself, but lenders may request it for large extensions.
Can I raise funds if I’m on a fixed rate? Yes — but you may face Early Repayment Charges (ERCs) unless your deal is ending soon.
How long does a remortgage for improvements take? Usually 4–8 weeks depending on valuation and legal work.
Can I borrow up to 90% LTV? Some lenders allow it, but rates may be higher and criteria stricter.
Does the lender check how I spend the funds? Funds must be used for home improvements, but lenders don’t usually audit spend unless it’s a large or structural project.