If your property has increased in value or you have paid down a significant amount of your mortgage, you may have built up equity in your home.
Equity is the difference between the value of your property and the amount you still owe on your mortgage. Depending on your circumstances, you may be able to release some of this equity by remortgaging.
Homeowners release equity for a variety of reasons. This could include funding home improvements, helping family members with a property purchase, consolidating certain debts, or purchasing another property.
For example, if your home is worth £400,000 and your outstanding mortgage is £200,000, you have £200,000 of equity in the property. This does not mean you can automatically borrow the full amount of your equity. The amount you can borrow will depend on the lender's criteria and your affordability.
Increasing your mortgage will also increase your monthly payments and the total amount of interest you pay over the mortgage term. It is therefore important to consider the long-term cost before deciding to release equity.
Lenders will assess your income, expenditure, existing mortgage and the reason for the additional borrowing. They will also consider the property's current value.
A mortgage broker can compare different options and help you understand whether remortgaging or another form of borrowing is appropriate for your circumstances.
At Victoria Park Mortgages, we can review your current mortgage, assess your available equity and compare options from across the market. Get in touch and see how we can help.