Learn how a capital-raising remortgage may release equity for home improvements, helping family or another property, subject to affordability and lender criteria.
Lender fees and incentives explained
This is a standard remortgage - not equity release
Remortgaging to release equity - also called a capital raising remortgage - means taking a new mortgage for more than you currently owe and receiving the difference as a lump sum. The money comes from the value built up in your home through price growth and the capital you have repaid.
Your equity is simply your home's value minus the mortgage owed on it. A capital raising remortgage converts part of that equity into cash while you carry on making normal monthly payments on the new, larger mortgage.
A capital-raising remortgage changes secured borrowing against your home. Compare the interest rate, fees, term and total amount repayable. Any valuation or legal-fee incentive depends on the selected lender product and its conditions.
The names are confusingly close, so it is worth being precise. Remortgaging to release equity is a standard mortgage: you make monthly payments, pass normal affordability checks, and the debt does not grow. 'Equity release' usually refers to lifetime mortgages - later-life products where interest can roll up against the home and the loan is repaid when you die or move into care.
Capital Raising Remortgage vs Equity Release (Lifetime Mortgage)
Capital raising remortgage
Equity release / lifetime mortgage
Monthly payments
Yes - normal mortgage payments
Often none - interest rolls up
Does the debt grow?
No
Yes, if interest rolls up
Qualified on
Income and affordability
Age and property value
Typical borrower
Working homeowners
Older homeowners, often 55+
Older borrowers who want monthly-payment lending should also see retirement interest only mortgages.
If you are an older borrower weighing these routes, our retirement interest only mortgages page covers the middle path - interest-only payments in later life without roll-up.
What can the money be used for?
Lenders ask the purpose of released funds and each has rules about what it will accept. Commonly accepted purposes:
Home improvements - extensions, renovations, energy upgrades; the most widely accepted purpose
Helping family - most often a gifted deposit towards a child's first home
Buying another property - a deposit for a second home or rental investment
Buying out a partner's share after separation or divorce
Buying land, a share of freehold or extending a lease
Business purposes and some other uses - accepted by a narrower set of lenders
Using released equity to clear debts is its own subject with its own risks - that route is covered separately on our debt consolidation remortgage page. And if the equity is coming out of a rental property rather than your home, see buy to let remortgages.
How much equity can you release?
Two limits decide the figure, and the lower one applies:
Loan-to-value: The new total mortgage must sit within the lender's maximum percentage of your home's value - with stronger pricing at lower loan-to-values
Affordability: The new, larger payment must fit your income and outgoings under the lender's checks - releasing equity is borrowing more, and the lender treats it exactly that way
In practice: take your home's current value, apply the lender's maximum loan-to-value, subtract your existing mortgage - that is the ceiling, then affordability decides how much of it you can actually take. Your adviser will give you the realistic figure, not just the headline one.
The process and the checks
Review: Current mortgage, property value, the amount you want and what it is for
Broad lender comparison: We compare capital raising deals from across a range of UK lenders, matched to your purpose
Application: Full affordability assessment on the new, larger loan - payslips, bank statements, outgoings
Valuation and legal work: Depends on the selected lender product
Completion: The old mortgage is repaid and the released funds are paid to you as a lump sum
Allow four to eight weeks end to end. If your current deal still has time to run, an early repayment charge may apply - sometimes worth paying, often worth waiting out; we show you the arithmetic either way.
Costs and fees
Valuation cost or incentive - depends on the selected lender product
Legal cost or incentive - depends on the selected lender product
Lender arrangement fee on some deals - compared on overall cost
Early repayment charge - only if leaving your current deal early
Our broker fee - typically £1,250, confirmed in writing before you commit to anything
Full details of how we charge are set out in our regulatory statement. Remember the trade-off that matters: releasing equity increases your mortgage, your monthly payment and the interest paid over the term.
Why use LifePro?
Independent mortgage brokers comparing a range of UK lenders
Valuation and legal-fee terms explained before application
We match your purpose to lenders who accept it - no wasted applications
CeMAP qualified advisers
Straight answers on the trade-offs, not just the headline sum
Frequently Asked Questions
Is remortgaging to release equity the same as equity release?
No. This is a standard remortgage with monthly payments and affordability checks, and the debt does not grow. Equity release normally means a lifetime mortgage, where interest can roll up and the loan is repaid when you die or move into long-term care.
Do I pay tax on equity released from my home?
No - the money is borrowing, not income, so there is no income tax on it. What you use it for can have its own tax consequences (a rental property purchase, for example), which is a question for your accountant or tax adviser.
How much equity do I need to remortgage?
Enough that the new, larger mortgage still sits within a lender's loan-to-value limits - and the more equity remaining after the release, the better the pricing. Affordability is the second gate: the larger payment has to fit your income under the lender's checks.
Can I release equity to give my children a deposit?
Yes - gifting a deposit to family is one of the most common reasons homeowners release equity, and most lenders accept it. The receiving child's lender will want a signed letter confirming the money is a gift rather than a loan, which we help prepare.
Will my monthly payments go up?
Almost always, yes - you are borrowing more. How much depends on the amount released, the rate secured and the term. If your current deal was expensive, moving to a better rate at the same time can soften or occasionally offset the increase; your adviser shows the exact figures before you decide.
Can I release equity if I'm older or retired?
Age itself is not the barrier - affordability is, and pension income counts. Standard lenders each set maximum ages; beyond them, retirement interest only mortgages are designed exactly for later-life borrowing with monthly payments. We advise across both routes.
Put Your Home's Value to Work
Speak to a CeMAP qualified adviser about releasing equity - what you could raise, what it costs and whether it is the right move
