How Much Can I Borrow on a Remortgage?

How much you can borrow when you remortgage is also based on borrowing against the value of your house, which is called the LTV (loan-to-value). 

Lenders need to assess what level of risk your property and you represent, viewing a person with a lower LTV percentage as less risky. If your property is valued at £200,000 and you’re looking to borrow £150,000, then your LTV would be 75%.

You don’t need a deposit with a remortgage like you did with your first mortgage; instead, you need to show how much equity you have.

Your equity is not how much you have paid off your mortgage - it's the current market valuation minus how much you owe. 

So, the amount you can borrow when you remortgage depends on your income, your equity, and the level of risk you represent to a lender. 

So far, so good - but it’s also important that you can afford to repay the remortgage each month, which is where affordability comes in.

Whether you can afford your mortgage payments will be assessed by the lender when you apply for a remortgage. You can use our repayment calculator to understand what your monthly repayments might be. 

One of our mortgage advisers can also help you understand what you can borrow versus what you can comfortably afford to pay each month - they’ll also discuss your lender options with you. 

It’s also worth noting that your credit history of paying on time each month for your mortgage and other bills impacts your ability to obtain a remortgage. If you’re concerned, it’s best to be upfront with the mortgage adviser, as they can select lenders who are more likely to lend you money.

Now you have roughly worked out what you can afford to borrow, you’ll need to look at what remortgage rates and remortgage deals are available. You can do this yourself by looking at our remortgage best buys and by getting in touch with one of our advisers on 0330 433 2927.

It’s important to look at the cost of borrowing (interest rate), any fees, the overall cost of borrowing (APRC), flexibility to overpay and take mortgage payment holidays, any incentives like cashback and free valuations, and who the product is available to. Your John Charcol mortgage adviser will help you find a deal suitable to your needs and circumstances.

Some remortgage products have a minimum and maximum amount and restrict the rate to people with a lower LTV. In general, the lower the LTV you have, the cheaper the remortgage rate you can access.

The remortgage process can take 4 - 8 weeks if there are no complications along the way. 

All lenders that are regulated by the Financial Conduct Authority (FCA) have rules and procedures to protect you, meaning you’ll be guided through a process to ensure you understand the financial obligations and details of the remortgage. 

You’ll receive remortgage key facts documents, which outline everything you need to know about the remortgage deal you’re interested in. You’ll need to sign and return documentation to confirm that you’d like to proceed with the new remortgage. 

Whether you choose to stay with the same lender or switch to a new lender will determine the evidence required and the remortgage process. 

A remortgage adviser can help you understand the remortgage process, from understanding how much you can borrow to application and beyond. To get in touch with one of our expert advisers today, give us a call on 0330 433 2927 or enquire online.