Are you planning to make home improvements such as an extension or shiny new kitchen or bathroom? How about improving your home’s energy efficiency with new windows, insulation, energy efficient heating, or solar panels?

Rather than take out a large personal or home improvement loan, remortgaging may be another solution. Using equity that you have built up in your home, you could top up your existing mortgage or switch your mortgage to provide funds for your renovations.

MortgageOne can help you to get a great deal on your home renovation remortgage, use our mortgage calculator to see how much you could borrow for your equity release mortgage.

Remortgaging for Renovations

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Advantages of remortgaging

Equity is the difference between the balance of your mortgage and the property value of your home. 

Your home’s value may have increased since you took out your initial mortgage and you may have built up equity in your home through your monthly repayments which you can use to fund your home improvements.

Your home may have increased in value, and your financial situation and credit scores may have improved since you first took out your mortgage. 

This may mean that you are eligible for lower interest rates as your loan to value will be lower and your income higher. 

Bear in mind that Central bank lending rules will stipulate that the maximum LTV remains at 90%, and you will be limited to borrowing 3.5 times your gross income when remortgaging.

If you are topping up your existing mortgage or switching your mortgage, you may be able to get a new loan at a lower interest rate and reduce your monthly repayments.

This may mean that  you will be borrowing over a longer term. Lenders will still have upper age limits, usually 70, but lenders may vary.

Choosing an equity release mortgage, or remortgaging, usually results in making repayments at a lower interest rate than a personal or home improvement loan.

However, there may be some charges associated with topping up or remortgaging. You may face an Early repayment Charge (ERC) with your current lender, especially if you are on a fixed term currently. You will also likely face a charge for a valuation on your home (in the region of €150), and you will likely need to pay legal fees (€1,000- €1,500). You will need to balance these charges with the savings achieved by remortgaging.

If you are undertaking renovations to improve the Building Energy Rating (BER) of your home, such as improving energy efficiency or insulating, you may qualify for a green fixed rate mortgage which will typically be a lower interest rate.

You may also be able to get a mortgage with cashback which can help to pay for those legal fees or go towards your home improvement budget.

You may not plan to sell your home and you may wish to make it more comfortable by renovating but home improvements can increase the value of your home. 

Carefully estimate the costs associated with your home improvements and get professional advice on the scope and costs of your renovations to ensure that your renovations will add value. It may not be worth considering remortgaging your home for temporary improvements such as new furniture.

Secure Lower Rates

Our team will help you switch your mortgage to more attractive rates, reducing your monthly repayments

How does remortgaging work?

For the most part, remortgaging works in a similar way to a mortgage for a property purchase. There are a number of steps to remortgaging your home for renovations or home improvements.

Get an idea of how much your home is worth. Get a sense of property prices in your area and research the Property Price Register so that you can estimate how much equity you may have in your home. 

It is worth getting a professional valuation carried out and you will probable need to do so for your mortgage lender.

This will depend on the current value of your home and the balance of your current mortgage. Your financial situation including your income, expenses and savings will also affect how much you can borrow.

Use our MortgageOne mortgage calculator to see how much you could borrow or discuss your situation with one of our specialist advisors.

Research and compare offers from various lenders. You may find that the mortgage market has changed since you first took out your mortgage. You may wish to top up your mortgage with your current lender but it is worth comparing offers from a range of lenders to see the rates that you are offered by various lenders.

You will also have to choose between a fixed or variable rate depending on the rates you are offered as well as your preference for fixed repayments or potential savings. If your renovations are intended to lower the BER of your home, you may wish to consider a Green Fixed Rate mortgage.

Calculate the costs involved in remortgaging such as any early repayment charge (ERC) on your current mortgage, the cost of a valuation (approx €150), solicitor’s fees ( €750 – €1,000).

You will need to weigh these against potential savings of remortgaging and also compare them to the costs of a home improvement loan with a higher interest rate but less initial costs.

Your mortgage advisor will discuss your circumstances and needs with you and complete one application for multiple lenders to save you time and the hassle of dealing with duplicate paperwork.

Your mortgage advisor will work with you if you are not yet ‘mortgage ready’ and will only approach lenders when you are likely to be offered a mortgage by lenders. Your mortgage advisor also has insight into the mortgage market and various lenders criteria and will approach lenders which are the best ‘fit’ for you.

Once you have your mortgage approval in principle, you can then refine your plans for home renovations and apply to your new lender for a formal offer letter. 

You may need to provide information such as salary certificates, payslips, ID and bank statements with your application. 

You will need a solicitor to handle the legal aspects of your remortgage and to arrange the transfer of funds between lenders as well as the draw down of your new mortgage.

Mortgage protection Insurance when remortgaging your home

Don’t forget to update your mortgage protection insurance and home insurance at this point as you will need to update them.

Your mortgage protection will need to be updated if you renegotiate your mortgage or switch to a new mortgage provider to reflect your new mortgage balance and possibly a new mortgage term.

You will also need to inform your current home insurer that you are undertaking home renovations as it may affect your current home insurance cover. You will also need to update your home insurance cover to reflect any change in value or rebuild cost of your home.

Let’s Get Started

Our team will help you switch your mortgage to more attractive rates, reducing your monthly repayments

Before remortgage get project estimates

For significant home improvements or for major renovations, you may need to provide an invoice or a formal estimate for the work from an architect. This makes remortgaging for renovations slightly different to a traditional first time buyer or home mover mortgage.

Some lenders may allow you to draw down funds with this estimate, but for more extensive renovations, the funds may be released on a phased basis as work is completed and receipts for the work provided.

Obtaining planning permission, if necessary for your home renovation plans, may also be required by your mortgage lender.

See how much you could borrow for renovations

MortgageOne has experienced and independent mortgage advisors who are ready to discuss your remortgage needs with you.

We can help you to get mortgage quotes at the best rates meaning that you could potentially save on your monthly repayments or release the equity that you have built up in your home for renovations.

We can also discuss your mortgage protection and home insurance needs with you as your remortgage application progresses.

Use our mortgage calculator to see how much you could borrow or call us and you can arrange a no obligation consultation and mortgage assessment with one of our specialist advisors to turn your home improvement dreams into reality.