How much you can remortgage your house for depends on various factors, such as your reason for remortgaging. You may be remortgaging to switch to a better deal, especially if you are reaching the end of a fixed-rate mortgage to prevent being moved onto your lender’s higher Standard Variable Rate. Or you may be remortgaging to release equity as well, perhaps to fund home improvements or to invest in a Buy To Let property. In this guide, we’ll have a look at the different reasons for remortgaging and discuss how much you may be able to remortgage your house for.
Remortgaging to Switch to a Better Deal
Switching to a better deal is the most common reason for remortgaging – around 60% of homeowners remortgage at the end of their fixed-rate deal* because doing this can save thousands of pounds in interest each year. If you don’t remortgage at the end of your fixed-rate deal, you’ll likely be moved onto the higher Standard Variable Rate and your monthly repayments may increase. If you are remortgaging purely to switch to a better rate, without releasing equity, then the answer to ‘how much can I remortgage my house for?’, is however much is left on your current mortgage. So if you have £150,000 left on your mortgage, you’ll be able to remortgage for that amount. However, if your property has increased in value since taking out your mortgage, you may now be able to apply for a lower Loan to Value mortgage, meaning there should be cheaper deals available to you if you shop around. It’s important you use a mortgage broker who has access to thousands of products and understands the criteria of each lender, as they should be able to find you a great deal. To learn more about remortgaging in general, please read our guide ‘How Does Remortgaging Work?’
Remortgaging to Release Equity
When remortgaging to a better deal, you can also use this opportunity to release equity from your home as tax-free cash. This is a popular way to borrow because remortgage interest rates tend to be considerably lower than other forms of borrowing. Having said that, you may end up paying more interest over the term of the loan as mortgages often last for 20 years or more – but many people prefer this option as the lower monthly repayments make borrowing more affordable.
How much equity you’ll be able to release depends on many factors. You’ll need to get an up-to-date valuation to see how much equity you currently own, and instruct a mortgage broker to carry out a thorough search of the remortgage market to see how much you’ll be able to borrow and at what interest rates. Lenders will usually lend up to 90% of the value of your home, but this may vary depending on your affordability and credit score, as well as how you plan to use any equity you release. Based on your circumstances, the borrowing limits and interest rates offered to you could vary greatly from lender to lender, so it’s important you use a mortgage broker who has access to thousands of products to find a deal that works in your favour. Also, being rejected for a remortgage can damage your credit score, so this is another reason you should get professional advice before applying as your broker will understand the criteria of each lender. To learn more about releasing equity with a remortgage, please read our guide ‘Remortgaging to Release Equity’
The Bottom Line
How much you can remortgage your house for depends on your specific circumstances –
such as how much equity you own and why you want to remortgage. If you are remortgaging to save money by switching to a better deal, then you should be able to remortgage for the amount left on your current mortgage. If you also plan to release equity as tax-free cash, then you may be able to borrow up to 90% of the value of your home. Other factors that can affect how much you’ll be able to borrow, and at what rate, are your affordability, credit score, and which lender you choose – so speak to one of our remortgage experts to find out what deals are available to you.
We’ve been helping our local community with remortgages for over 30 years! We can search thousands of products to find you a great deal that suits your needs perfectly. We’ll also guide you through the process and liaise with your lender and solicitor to ensure the process goes smoothly for you.
Book your FREE no-obligation consultation with one of our friendly advisors to get going quickly. We have offices in Frimley and Basingstoke, or we can help you remotely via phone or video call if you’d prefer. We look forward to chatting with you!
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