Remortgaging to release equity

If you want to access some of the money tied up in your home without having to downsize you may have been considering remortgaging to release equity. If the value of your home has increased since you purchased it you may be able to free up some of the equity which has accumulated on the property. This means when you remortgage you will be paid a lump sum from your property’s increased value. 

What's involved

When remortgaging to release equity or ‘raise capital’ a lender will carry out a valuation of your home to work out just how much it has increased in value since the time of purchase, they will then calculate how much equity you can release from the part of the mortgage you have paid off through your monthly instalments as well as from the increase in value of the portion you put your deposit down on.

Doing so increases the size of your loan with the lender and as a result the amount you pay monthly compared with if you just remortgaged to get the lowest interest rate, it will also prolong how long it takes you to pay off your mortgage. Remember you risk losing your home if you cannot keep up with the repayments.

It is important to consider all of your different options when it comes to remortgaging to find the best plan for your situation. By remortgaging you will in most cases be required to pay arrangement fees again typically which are between £1000-2000 and you may have to pay leaving fees to your original lender as well as conveyancing fees to your new financier if you chose to change who your mortgage is with.

Click here to get mortgage quotes & advice

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. Equity release may affect your entitlement to state benefits and will reduce the value of your estate. It may involve a lifetime mortgage or home reversion plan. All content set out in this website is provided for information only and should not be considered as advice. It is strongly recommended that you seek advice of a qualified, independent financial advisor before making any decisions to take out an equity release product.