Remortgaging to Release Equity: A Comprehensive Guide

When you’re in need of funds and don’t want to take on any new debt, remortgaging your home to release equity could be a good option to consider. This process involves increasing the size of your mortgage in order to free up some of the equity you’ve built up in your property. But, is it the right choice for you? In this article, we’ll explore the basics of remortgaging to release equity, what you need to consider, and why it might be a good solution for you.

Page last updated – 16th February 2023

Checked for accuracy by:

Chris - Equity Release Editor

What is Remortgaging to Release Equity?

Remortgaging to release equity is a way to increase the size of your mortgage in order to access some of the equity you have built up in your property. Equity is the difference between the market value of your property and the amount you still owe on your mortgage. If you have built up a significant amount of equity, you may be able to use it to pay off debts, make home improvements, or pay for a big expense.

Why Remortgage to Release Equity?

There are many reasons why you might want to consider remortgaging to release equity. Here are a few:

  • Pay off high-interest debt: If you have high-interest credit card debts or loans, remortgaging to release equity can be a way to pay them off and reduce your monthly repayments.
  • Home improvements: You can use the equity you release to make renovations or home improvements to increase the value of your property.
  • Pay for a big expense: Whether it’s a wedding, a new car, or a holiday, remortgaging to release equity can provide you with the funds you need for a big expense.

How Does it Work?

The process of remortgaging to release equity is similar to taking out a new mortgage. You’ll need to shop around for the best mortgage deal, and compare rates and fees from different lenders. Once you’ve found a lender that you’re happy with, you’ll need to provide proof of income and expenses, as well as information about your property. The lender will then assess your application and make a decision on whether or not to offer you a mortgage.

If you’re approved, your new mortgage will be for a higher amount than your existing mortgage, and you’ll use the extra funds to pay off your debts or make home improvements. The lender will then use your property as security for the new mortgage, just as it does with your existing mortgage.

What to Consider When Remortgaging to Release Equity

Before you decide to remortgage to release equity, there are a few things you need to consider:

  • The cost: Remortgaging will typically cost you more in the long term, as you’ll be paying interest on a larger mortgage for a longer period of time.
  • Your age: If you’re approaching retirement, you may not have enough time left to pay off the larger mortgage.
  • Your property value: Your property value will affect the amount of equity you can release, so it’s important to consider this before you remortgage.

In conclusion.

Remortgaging to release equity can be a good solution if you’re in need of funds and want to access some of the equity in your property. However, it’s important to carefully consider the cost, your age, your property value, and your income before making a decision. If you’re not sure whether remortgaging is the right choice for you, it’s always best to speak to a financial advisor who can help you weigh up the pros and cons and find a solution that’s right for you.