Remortgaging for home improvements

If you’re looking to renovate to add value to your property or need the extra space, remortgaging could be a way to pay for it. It’s a way to borrow money by setting up a new mortgage deal.

 

We can help you understand

  • Options for borrowing money against the value of your home to pay for home improvements.
  • What to consider when remortgaging to pay for home improvements.
  • Other ways to get the money you need.

Paying for home improvements

There are two options for borrowing money against the value of your home to make improvements. Both can be expensive, so think carefully and seek financial advice before you decide.

1. Borrow more on your mortgage

If you want to stay with your current mortgage lender, they may lend you more money. This will depend on how much of your mortgage you’ve already paid off and how much you can afford to repay each month.

They’ll also look to see if your home has risen in value and if you can afford higher mortgage repayments.

It’s important to know that the interest rate on the amount you borrow for home improvements may be different to the interest rate on your original loan.

As with remortgaging, any extra you borrow will be secured against your home.

2. Remortgage

You could look for a new mortgage deal with a new lender, asking to borrow more to cover your renovation costs.

For example:

  • You have a mortgage of £140,000, and the work will cost £15,000.
  • Applying for a mortgage for £155,000 will give you the £15,000 you need.

Get quotes for the work you want to do so you know how much you’ll need to borrow.

If you borrow more, you’ll be paying interest on a higher amount over the full term of the mortgage.

You may get charged an early repayment charge by your existing lender. Check your mortgage agreement for any fees and charges involved.

Things to think about if you remortgage to pay for home improvements

You'll owe more on your mortgage

Owing more on your mortgage may not seem like a big deal in the short term, but you need to think ahead.

If you were to have less money in the future, it may affect your ability to keep up with bigger mortgage repayments.

You’ll also be paying interest on the amount you have borrowed.

Early repayment charges

Before you remortgage, check whether your current mortgage deal has an early repayment charge.

You could be charged if you don’t read your mortgage agreement carefully.

Home improvements for the right reasons

While the work you want to do may seem like a good idea, home improvements won’t always add value to your home. It could cost you more than the value it adds.

Think about the types of improvements that could add the most value to your home. For example, turning a cellar into a living space, converting a garage into an extra room or updating your bathroom or kitchen.

Increasing the kerb appeal at the front of the house can also be a cheaper way to improve your home’s value.

If you are thinking of selling after you have done the work, research the market. You could also seek advice from an estate agent before you carry out any major building work.

Switch to a new mortgage deal

You could avoid legal and valuation costs by remortgaging to Halifax.

If you already have a Halifax mortgage, then you may be able to do a product transfer.

Remortgage to Halifax   Product transfer

You could lose your home if you don’t keep up your mortgage repayments

Other ways to get the money you need

Remortgaging isn’t the only way to borrow money for home improvements. Here are some other options.

Credit card

Purchases are protected under Section 75 of the Consumer Credit Act 1974. If something goes wrong, you may be protected.

Remember, unless there’s a promotional 0% interest rate, you’ll pay interest if you don’t clear the full balance every month. You may also be charged for cash withdrawals.

About our credit cards

Savings

This is the safest and most cost-effective option.

You may just have to wait until you’ve saved up enough money to carry out the work.

Find a savings account

Personal loan

Like with a mortgage, you can borrow a set amount of money and agree to repay it over a number of years. The difference is it’s not secured against your house.

Only take out a loan if you’re confident you’ll be able to afford the monthly repayments comfortably.

Get a personal loan quote

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Thinking of improving your home?

If you love where you live, use our handy tips to make the most out of it. And if you're planning a large project, you can check costs, look at remortgaging options and find out how to add value to your home.

Improving your home

Thinking of improving your home?

If you love where you live, use our handy tips to make the most out of it. And if you're planning a large project, you can check costs, look at remortgaging options and find out how to add value to your home.

Improving your home