With property prices soaring and the remortgaging market prospering, there’s never been a better time to remortgage your home. If you’ve been considering carrying out home improvements, remortgaging to release equity can be a great way to manage the cost and make the most of your hard-earned property.
The remortgaging market is in ‘overwhelmingly healthy’ shape
LMS’s latest ‘health check’ of the remortgage market has found that it is in incredibly healthy shape this quarter, with growth indicators for every factor proving prosperous.
Factors assessed include approval rates, borrowing costs, housing equity and consumer sentiment. Borrowing costs in particular were shown to be extremely healthy, leaving borrowers in a better financial position than they have been since 2017.
Furthermore, the cost of two and five-year fixed rates have been in decline for the past two quarters as lenders strive to compete against each other.
Homeowner equity rates also reached an all-time high, in part due to the stamp duty holiday, and enhanced by high house prices and high demand with low supply.
Remortgage your home to release equity
With house prices reaching new heights, it is likely that you have built up equity since purchasing your home. Releasing some equity from your property can be used to fund home improvements, from a new kitchen or bathroom to loft conversions and extensions. Remortgaging saves putting a large expense on a credit card or taking out an additional loan, and mortgage interest rates tend to be lower than those on personal loans or credit cards.
You can find out how much equity you’ve built up in your home by looking at the percentage of your mortgage you’ve paid off – and therefore how much of your property you own – and take this out of the property’s overall value. Local estate agents often offer free property valuations to help you estimate your home’s value.
How much equity should you release?
Releasing equity from your property for home improvements is a good solution if you have built up a large amount of equity. Typically, lenders reserve their best deals for borrowers in lower loan-to-value mortgages around the 60-65 per cent mark.
If you are thinking of releasing equity from your property, it is a good idea to talk to an independent mortgage advisor who will help you work out how much cash you can release without drastically changing the loan-to-value of the mortgage.
Graham & Co’s in-house mortgage advisor, Tristan, can offer you professional, impartial advice about remortgaging your home – get in touch today.