House prices have increased dramatically over the past decade or so, even when you take into account the recent slump in the property market. This has left a lot of people with houses that are worth a lot more than their mortgage amount. You can use this disparity to release the equity in your home. All you have to do is remortgage it for a higher sum than your previous mortgage, and you can use the leftover cash for whatever you want. In this section, we tell you how to remortgage your home to release equity.

If your home has risen substantially in value since you bought it, you may be able to release a lot of equity if you remortgage your home. A remortgage is when you take out another mortgage to pay off your old one. In the context of a remortgage, equity is the difference between the value of your home and the size of your current mortgage. For example, if your home is now worth £300,000, and you have a mortgage for £200,000, this means that you have £100,000 worth of equity in your property, which you can release if you remortgage it. However, if your house has fallen in value, and is worth less than your mortgage, then you have what is known as negative equity, which means that you will effectively lose money if you sell or remortgage your property. Therefore, it only makes sense to remortgage your home if it has gone up in value.

A remortgage can release a lot of funds, with which you can do anything you like. However, it is worth noting that if you remortgage your house for a higher value, then the mortgage payments will could rise, which could cancel out the advantages of a remortgage. However, in some circumstances, the equity released when you remortgage your home will more than compensate for this, especially if your new mortgage is at a more favourable rate than your old one.

Usually, people use the equity that they release when they remortgage their home to pay for things like clearing debts, a wedding, or home improvements. In order to release the equity in your home, you need to organise a remortgage. A remortgage entails taking out a new, larger mortgage to pay off your old one. The current market value of your home will determine how much you can remortgage for, but if you only need a certain amount, you do not need to remortgage your home for its full value. Rather, you can simply remortgage your home for the same amount as your old mortgage, plus the amount of money that you need. So, if you have a £200,000 mortgage on a home that is now worth £300,000, and you needed £25,000 to pay for a wedding, you could simply remortgage your home for £225,000, and you would receive £25,000 to spend on the wedding from the proceeds of your remortgage.

When you first take out a mortgage or remortgage, you only have to pay the introductory interest rate, which is a lot lower than the lender’s standard variable rate. If you haven’t reviewed your mortgage for a while, there is a fair chance that you will end up paying a much lower rate when you remortgage your home, especially during this introductory period. So you could end up with a lot of cash to play with, and lower mortgage repayments when you remortgage. In some circumstances, a remortgage can make sound financial sense, especially if you are going to use the equity from your remortgage to pay off other debts. However, it is well worth doing the necessary sums before you remortgage your home, as there are circumstances where a remortgage could leave you worse off than you were before.