Can I remortgage to release equity?
15th April 2019
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For most people their home is their greatest asset so when it comes to finding cash to improve your home or pay off debts, choosing to remortgage to release equity could be the solution.

Raising capital by remortgaging is a very viable and popular way to raise larger sums of money, allowing a longer repayment period than most loans.

With mortgage rates low this also allows homeowners the peace of mind to know that they will not end up paying huge amounts of interest on money they borrow.

If you have paid a large part of your mortgage off already or have been lucky enough to see a large rise in the value of your home it could be that you have a large amount of equity in your home – equity is the value of your home outside of what you own on your mortgage.

If you don’t plan to move home it is possible to draw on this asset to release cash when you need it, but careful thought should always be given to additional borrowing.

Five factors to consider when remortgaging to release equity

  • Can you afford the higher repayments easily? It goes without saying that when choosing to remortgage to release equity it is vital that you ensure you can afford the repayments without putting yourself in a difficult position.
  • Additional costs – The aim of remortgaging your home is to free up cash so beware of costs incurred in the process of doing so. If you have to pay a fee for early repayment this could impact on the amount of cash you release.
  • Has the value of your home increased? – If the value of your house has gone up so too will the Loan to Value (LTV) rate, which means you have more equity in your home and could access a cheaper mortgage rate. Switching to a lower rate but borrowing more could see you pay a similar amount to your current deal if the interest rate is lower.
  • What deals are available -If your current mortgage is at a higher rate than new offers, choosing to remortgage to release equity could make sense in allowing you to capitalise on the lower rates, without necessarily seeing a large increase in payments.
  • Repayment time – Remortgaging to raise capital is often the only feasible way to borrow a large amount of money and enjoy good rates of interest while paying money back over a long period of time. This allows the repayments to be far more manageable. However, if a smaller amount of money is needed it may suit your needs to take out a loan paid back over a shorter period of time.

Can you remortgage for home improvements?

Deciding to remortgage to release equity to fund home improvements is a popular choice.

When moving to a bigger home is out of reach financially, adding an extension can provide extra space and breathe new life into your home.

Home improvements such as adding a conservatory, a new bathroom or a new kitchen may also add value to your home.

Meeting the costs of large projects can be difficult and for many people the best way to do this is by seeking to remortgage to release equity, allowing them to spread the payments over the same time frame as their mortgage.

Releasing equity to consolidate debts

Financial stress is another reason you may want to free up some of the equity in your home. Short-term loans and credit card debts can easily spiral out of control and attract high interest rates.

Taking out a larger loan by remortgaging to raise capital could be a good way to take control of your finances and relieve the burden of financial stress.

Speaking to a mortgage advisor is a good way to find out what sort of remortgage deal could work for you.

Whether you need to remortgage to release equity to create the home of your dreams or to consolidate your debts for a fresh start, a mortgage advisor will be able to find the best rates to match your needs and advise you on what steps to take.

For more information on remortgaging to release equity contact AMG Financial Solutions - Staffordshire on 01785 225983 or email

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