Remortgaging your home: Exploring the possibilities for your funds

Potential uses of remortgage funds

If you’re a homeowner looking to utilise the capital in your home, remortgaging could be a great way to access additional funds. 

Remortgaging is the process of switching your current mortgage to a new lender or product to obtain a better interest rate or unlock the capital built up. While remortgaging can offer many benefits, it’s crucial to use the funds wisely to ensure that you get the most out of your investment. 

Working with an adviser

From home renovations and extensions to paying off debts and investing in rental properties, we’ll provide you with plenty of inspiration to help you make the most of your remortgage funds.

Remember, remortgaging is a significant financial decision, and it’s essential to seek professional advice before making any decisions. 

Our expert advisers can help you navigate the remortgaging process and ensure that you make informed choices that are right for your unique circumstances. 

Popular ways to use remortgage funds

Home improvements 

Remortgaging your property can provide you with a source of funds to improve your home.

Home improvements not only make your home more comfortable to live in, but can often increase its value.

This makes home improvements a popular reason for remortgaging. Examples of home improvement projects that can be funded through remortgaging:

Kitchen and bathroom renovations: These are popular home improvement projects that can increase your property’s value. Upgrading your kitchen and bathroom with modern fixtures and finishes can make your home more attractive to potential buyers. 

Extension or loft conversion: If you need more space, extending your home or converting the loft can be a great way to create additional rooms. This can also increase the property’s value. 

Garden improvements: Improving your garden can increase your home’s appeal to potential buyers. You could consider landscaping, adding decking, or installing a patio.

Energy-efficient upgrades: Upgrading your property’s insulation, windows, and heating system can reduce your energy bills and make your home environmentally friendly.

The benefits of home improvements

The benefits of investing in home improvements go beyond increasing your property’s value. By creating a more comfortable and modern living space, you can improve your quality of life. 

When considering remortgaging for home improvements, it’s important to carefully consider the costs and benefits. Not all improvements necessarily add value to a home or may not add as much value as they cost.

Working with a mortgage adviser can help you determine whether the costs of the improvements are likely to be outweighed by the increase in value.

Consolidating Debt

Consolidating debt is a popular reason for homeowners to consider a remortgage. By using the capital in their home, homeowners can consolidate multiple high-interest debts, such as credit card balances or loans, into one payment.

This can make managing debt more manageable, and potentially save money on interest charges.

One of the biggest benefits of consolidating debt through remortgaging is the potential to save money on interest charges. Credit card and personal loan interest rates can be high, often ranging from 10-30% or more, while mortgage interest rates are typically lower. Consolidating debt into a mortgage with a lower interest rate can save you money in the long run, but it is important to consider the mortgage term and other factors before making a decision.

Consider the risks

It’s important to consider the risks before consolidating debt through remortgaging, however. By consolidating unsecured debt into a secured loan, homeowners are putting their property at risk. If they are unable to make the mortgage payments, they could face repossession and loss of their home.

It’s also important to consider the impact that consolidating debt may have on credit scores. 

While consolidating debt can help simplify payments and potentially save money on interest charges, it can also increase the amount of debt owed and affect credit utilisation ratios. Also, you will be transferring unsecured debt into secured debt, which could put the home at risk. It’s important to note that whilst the interest may be lower, the term of your mortgage is likely to be longer than the term you may have left on outstanding debts and therefore it’s likely the debts will be paid back over a longer period of time by being added to the mortgage, although the interest rate may be lower. A mortgage adviser will be able to advise you on whether this is the right option for you.

Investing in Property 

Investing in property can be a smart way to maximise the value of your remortgage funds. By using the funds to purchase an investment property, you can potentially generate rental income and build capital over time. Some types of property investments include buy-to-let properties, student accommodation, and holiday homes. 

However, it’s important to consider the risks and benefits of property investments before using remortgage funds for this purpose. While rental income can provide a steady stream of cash flow, there are also costs associated with property ownership, such as property management, maintenance, and potential vacancies. Additionally, the property market can be unpredictable, which can impact the value of your investment. Property prices can go down as well as up, and rental income is not guaranteed.

Working with an adviser who specialises in property investments can help you navigate the risks and benefits of this type of investment. They can also help you identify properties that are likely to provide a good return on investment, and help you develop a long-term investment strategy that aligns with your financial goals.  

Some Buy to lets and Houses of multiple occupants are not regulated by the Financial Conduct Authority. 

Family Support and Ambitions 

Remortgage funds may serve various purposes, depending on your individual circumstances and needs. For instance, they could potentially be allocated towards the costs of private education, providing an avenue for supporting educational goals within your family.

Additionally, these funds could be used to plan meaningful family experiences, including holidays. Such decisions should be carefully made, considering the long-term financial implications of borrowing against your property.

Lastly, remortgage funds may support adult children, such as assistance with a mortgage deposit or university fees. This option requires thoughtful consideration, given the long-term commitment and potential financial risk associated with remortgaging.

Remember, it’s vital to seek professional financial advice before making significant decisions, like remortgaging your home. It’s important to ensure that any course of action aligns with your long-term financial goals and circumstances. This option increases your own debt, potentially risking your home to support others.

Starting a Business 

Starting a business can be a daunting prospect, especially when it comes to financing. One option to consider is using remortgage funds to provide startup capital. By remortgaging your property, you can release capital to invest in your business. 

There are several advantages to starting your own business, such as being your own boss and having the potential for financial independence. Additionally, starting a business can be a way to pursue a passion or turn a hobby into a career. 

However, it’s important to consider the risks and challenges of starting a business, such as cash flow issues, market competition, and the potential for failure. Before investing your remortgage funds into a business, it’s crucial to conduct thorough research and develop a solid business plan. 

It’s also important to remember that using remortgage funds to start a business puts your property at risk. If the business doesn’t succeed, you could lose your home. Therefore, it’s essential to carefully weigh the risks and benefits before making a decision.  

Making the decision

Remortgaging is a significant financial decision, and it’s important to seek professional advice before making any decisions. A mortgage adviser can help you navigate the remortgaging process, understand the costs and benefits of remortgaging for specific purposes, and ensure that you make informed choices that are right for your unique circumstances. 

Our advisers are available to provide you with the guidance and support you need to make the most of your remortgage funds. Whether you’re interested in making home improvements or investing in rental properties, we can help you find the right remortgage deal and make informed decisions that align with your goals and financial situation. 

So if you’re considering remortgaging or have any questions about the process, don’t hesitate to contact us. 





This article is for guidance purposes only and does not constitute advice. Each mortgage lender will have different lending criteria, however a mortgage adviser will be able to help you navigate which lender may be suitable for you and if you meet their criteria.

Approved by The Openwork Partnership on 01/08/2023

Status Mortgage Services is a trading style of Status Financial Services Limited which is an appointed representative of The Openwork Partnership, a trading style of Openwork Limited which is authorised and regulated by the Financial Conduct Authority.