Your home is likely to be your biggest asset, so it's no surprise that many homeowners choose to invest in improving it rather than moving. Whether you're planning a new kitchen, a loft conversion, an extension, or simply modernising your property, remortgaging can be an effective way to fund the work.

In this guide, we'll explain how remortgaging for home improvements works, the benefits and potential drawbacks, and what lenders will consider before approving your application.

What Is a Remortgage?

A remortgage is when you replace your existing mortgage with a new one. This could be with your current lender or a different lender.

Many people remortgage when:

• Their fixed-rate deal is ending.

• They want to secure a better interest rate.

• They need to borrow additional money.

If you're looking to improve your home, you can often increase the size of your mortgage and use the additional funds to pay for the renovations.

How Does It Work?

Let's say:

• Your home is worth £350,000

• You currently owe £180,000 on your mortgage

You'd like to build an extension costing £40,000.

Rather than taking out a personal loan, you could remortgage for £220,000. Your existing mortgage would be repaid and the additional £40,000 would be released to you (minus any fees), allowing you to fund the project.

What Home Improvements Can You Fund?

Most lenders are happy for additional borrowing to be used for genuine home improvements, including:

• Extensions

• Loft conversions

• New kitchens

• New bathrooms

• Conservatories

• Garage conversions

• Landscaping

• Energy efficiency improvements

• Solar panels

• Replacement windows and doors

Many improvements can also increase the value of your property, making the investment even more worthwhile.

Will the Lender Value My Home?

Yes.

The lender will assess your property's current value to calculate your Loan-to-Value (LTV).

Some lenders may simply use an automated valuation, while others may instruct a surveyor to inspect the property.

If you're planning significant structural work, your adviser can also discuss whether the lender will consider the property's expected value after the improvements have been completed.

How Much Can I Borrow?

This depends on several factors:

Your Income

The lender will assess your affordability using your income and existing commitments.

Your Credit History

A good credit profile generally provides access to more lenders and better rates.

Loan-to-Value (LTV)

The amount you can borrow depends on how much equity you have.

For example:

Every lender has different lending criteria, so it's worth obtaining advice before making plans.

Is Remortgaging Better Than a Personal Loan?

In many cases, yes.

Mortgage interest rates are usually much lower than unsecured loan rates because the borrowing is secured against your property.

Advantages include:

• Lower monthly repayments

• Longer repayment terms

• Ability to borrow larger amounts

• Potentially lower interest costs

However, because the borrowing is spread over many years, you'll usually pay more interest overall unless you choose to make overpayments.

Could It Increase My Property Value?

Many home improvements add value, although there are no guarantees.

Projects that often provide the best return include:

• Modern kitchens

• Additional bedrooms

• Loft conversions

• Extensions

• Energy-efficient upgrades

• High-quality bathrooms

Improving your home's EPC rating can also make it more attractive to future buyers.

Things to Consider Before Remortgaging

Before increasing your mortgage, think about:

• Will the improvements genuinely improve your lifestyle or add value?

• Can you comfortably afford the higher monthly repayments?

• Are there early repayment charges on your existing mortgage?

• Will the project require planning permission or building regulations approval?

• Have you obtained accurate quotations from contractors?

A mortgage adviser can help you understand whether remortgaging is the most cost-effective option.

Should You Wait Until Your Current Deal Ends?

Not necessarily.

If your current mortgage has early repayment charges (ERCs), it may still be worthwhile remortgaging if the savings or benefits outweigh the costs.

An adviser can compare:

• Remaining on your current deal

• Product transfers

• Remortgaging to another lender

• Further advances with your existing lender

How Long Does the Process Take?

A typical remortgage takes between 2 and 8 weeks, depending on the lender and whether a valuation or legal work is required.

If you're planning building work, it's sensible to arrange your finance before committing to contractors.

Is Remortgaging Right for You?

Remortgaging for home improvements can be an excellent way to unlock the equity in your home and spread the cost of major renovations over a longer period.

Every homeowner's circumstances are different, and the most suitable option will depend on your income, property value, mortgage balance and future plans.

At Chetwood Lloyd Mortgages, we compare mortgages from over 100 UK lenders to help you find the most suitable way to finance your home improvements. As an independent, fee-free mortgage broker, we'll explain your options in plain English and guide you through the entire process from application to completion.