Find your best local estate agent Start here
September 12, 2023
4 minute read
With soaring mortgage rates, are you one of the many homeowners who wants to improve your home without remortgaging?
Remortgaging to fund home improvements has become expensively unappealing for many. That’s because if you’re currently on a cheap fixed mortgage deal, if you remortgage now to borrow more, your new mortgage rate could be much higher than your current one – and by remortgaging you’ll pay this new, higher rate on your entire mortgage.
In September 2021, the average 5 year fix was 2.63%, while the average 2 year fix in September 2023 is 6.15%, according to Moneyfacts. Assuming a £200,000 mortgage over 25 years, this would mean a jump in mortgage payments from £910 a month to £1,307. Plus, you may need to pay fees to leave your current mortgage deal.
But there are ways to improve your home without remortgaging – here are your options.
When you take out a further advance, this means you borrow more money from your current mortgage lender. If you choose this route to improve your home without remortgaging, you don’t need to worry about early repayment charges or your entire mortgage amount being moved onto a higher rate. The rate you’ll be charged on any additional borrowing may be different from your current mortgage rate. Although even if you need to pay a higher rate, this will only apply to the extra amount you borrow.
However, by taking out additional borrowing you will be increasing the size of your mortgage so you’ll need to be sure you can afford the repayments.
Before taking the plunge, it’s a good idea to speak to our partners at Chartwell Funding, they’ll look at all your options, including a further advance, remortgaging or a second charge mortgage if that’s the best fit. Speak to them on 01454 809 300 for no-obligation discussion of the possibilities. Or fill in the form below and they’ll get in touch.
Homeowner loans, also known as secured loans or second-charge mortgages, allow you to borrow money from a different lender to your original lender using your house as security. Second charge mortgages are increasingly popular; according to the latest statistics from the Finance & Leasing Association, over the past 12 months, lending on these mortgages has increased by 10% compared to the previous period.
Lenders consider second charge mortgages a higher risk so they attract higher rates than traditional mortgages. But like with taking out additional borrowing from your existing lender, when you take out a second charge mortgage, it has the benefit of allowing you to access money without touching your mortgage deal if you’re currently on a good deal, and you won’t face an early repayment charge either. And they also typically have more competitive rates than you would get if you took out an unsecured personal loan.
But second charge mortgages are not without their risks. Like with any mortgage secured on your property, if you fail to repay it you could lose your property. So before going ahead with this type of loan, make sure it’s the right option. If you speak to a broker that only offers secured loans, that’s what you’ll be offered. However, as we explain above, by speaking to our partners at Chartwell Funding, they’ll look at other options that may be better for you first, which could include a further advance on your mortgage or remortgaging. Speak to them on 01454 809 300 for no-obligation discussion of the possibilities.
If you’re aged 55 or over, you may consider equity release to improve your home without remortgaging. With a lifetime mortgage, the most popular type of equity release product, if you choose for the interest to be rolled up, you won’t need to make any monthly payments. Instead, the interest along with the amount you borrow, will usually be repaid to the equity release provider when the last homeowner dies or enters long-term care. It may be a good option if you’re equity rich and would like to use the money to make some much-needed changes to your home.
But it’s vital to do your research properly on equity release first. Read our guide Is equity release right for me? And speak to Key Advice, which offers advice and comparisons of five of the main equity release providers.
This type of loan lets you borrow money without putting up an asset (like your home) as security. You may not be able to borrow as much as you would with a secured loan and rates are typically higher. But it may be an option if you’re planning a smaller project like updating your kitchen. But as with all these other potential alternatives to improve your home without remortgaging, always research the alternatives before committing.
Depending on how much you’re likely to need, you may consider using a credit card to pay to improve your home without remortgaging, especially if it’s a relatively small job and if you put the balance to a 0% interest card. Plus, paying by credit card also offers some extra consumer protection. But make sure you have a plan and timescale to pay it off.
Can you use money from your savings to pay for some or all of the improvements? Rates on savings accounts may have increased in recent months but so has the cost of borrowing. So if you’re considering using savings to improve your home without remortgaging it’s important to weigh it up carefully.
March 25, 2025 
