Often, yes. If your home is worth more than you owe, you may be able to borrow against that equity, either through a further advance from your lender or by remortgaging to a larger loan. It depends on your equity, affordability, and what the money is for, and it increases the debt secured on your home.
The two main routes
The first is a further advance: extra borrowing from your existing lender on top of your current mortgage, often at a separate rate. The second is a remortgage to a new, larger loan, either with your lender or a new one, which can also get you a better rate at the same time. Which is better depends on your current deal, any early repayment charge, and the rates available. People commonly do this for home improvements, consolidating debt, or releasing a deposit for another property.
What decides how much you can add
- Your equity: the gap between your home's value and what you owe, within the lender's maximum loan-to-value.
- Affordability: the larger payment must fit your income and outgoings.
- The purpose: lenders ask what the money is for, and some uses are easier than others.
- Any early repayment charge if you remortgage away mid-deal.
A word of caution
Borrowing more secures more debt against your home and usually means paying interest over a long term, so consolidating short-term debt into a mortgage can cost more overall even if the monthly figure falls. It can still be the right move, but it is worth advice. Start with the remortgage guide, and speak to a regulated broker.
Founder, MortgageExplained
Adam spent over eight years as a mortgage adviser at Just Mortgages, with further experience in commercial finance. He is CeMAP and CF qualified. He built MortgageExplained to do one thing well: explain mortgages in plain English, so you know where you stand before you speak to a regulated broker. Every page on the site is written by Adam.
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