How to Release Equity from Your Home
If you're a homeowner and looking to make use of the value tied up in your property, releasing equity might be an option worth exploring. Whether you're planning home improvements, consolidating debts, or helping a family member, it’s important to understand your choices and how to make them work for you.
What does ‘releasing equity’ actually mean?
Releasing equity means borrowing money against the value of your home. You’re not selling up or moving out, you’re simply unlocking some of the value you’ve built up over time. There are two main ways to do this: through a further advance or by remortgaging.
Option 1: What Is a Further Advance?
A further advance is when you borrow additional funds from your existing mortgage lender. It’s treated as a separate part of your mortgage and will usually come with its own interest rate and term.
It can be a straightforward choice if your current lender is offering decent rates, or if you want to keep things simple and avoid switching to a new lender.
Option 2: What Is Remortgaging?
Remortgaging means moving your current mortgage onto a new deal. That could be with your current lender or a different one altogether. As part of the remortgage, you can apply to borrow more than your current mortgage balance.
This can work well if you want to combine everything into one new deal, especially if better interest rates are available or your financial circumstances have improved.
Equity and Affordability
To release equity, lenders look at two key things:
Your equity – this is the difference between your home’s current market value and the remaining balance on your mortgage.
Your affordability – lenders will assess your income, outgoings, and general financial stability to ensure you can comfortably manage the increased borrowing.
What Will Lenders Consider?
When reviewing your application, lenders typically assess:
The current value of your home
How much is left on your mortgage
Your income and employment type
Monthly outgoings and financial commitments
Your credit history
This helps determine how much additional borrowing is possible, and on what terms.
The Costs You’ll Want to Factor In
It’s easy to focus on the amount you could borrow, but don’t overlook the costs involved. These can include:
Higher interest rates on the additional borrowing
Arrangement or product fees
Early repayment charges if you’re leaving your current mortgage deal early
That’s why it’s worth sitting down with a broker before making any decisions. We’ll help you understand the full picture.
Is Now the Right Time for You?
Releasing equity can be a smart move when it’s done for the right reasons and with a clear plan. Whether you’re based in Broadstairs, Margate, Ramsgate, or anywhere across Thanet, we’re here to talk you through your options.
No pressure, no hard sell. Just honest advice based on your circumstances and goals.
Want to Chat It Through?
If you're curious about what’s possible, book a free call. We’ll help you explore your options and work out the best next step for you.
