Do you need a deposit to remortgage?

Remortgaging doesn’t involve a deposit in the way buying your first home does. There’s no cash sum you need to save and put down. What matters instead is your equity, the gap between your home’s current value and what you still owe, which is expressed as your loan to value (LTV).

Do you need a deposit to remortgage?

Not in the traditional sense. When you remortgage, you’re not buying a property, so there’s no purchase price to put a deposit against. Instead, lenders look at your loan to value: your mortgage amount divided by your property’s value. The lower that percentage, the more equity you effectively have “standing in” for a deposit, and generally the wider your choice of deals.

Equity instead of a deposit

Think of equity as doing the job a deposit does when buying. If your home is worth £250,000 and you owe £150,000, you have £100,000 of equity, or 60% LTV. That equity has usually built up two ways: through your monthly repayments reducing the balance, and through any rise in your property’s value over time.

How is your equity worked out when you remortgage?

Your equity is based on a current valuation of your property, not the price you originally paid or your own estimate of its worth. A surveyor or automated valuation carried out for the new lender sets the figure your LTV is calculated against, so if property values in your area have risen or fallen since you bought, your equity position may look different from what you expect. Our guide on whether you need a valuation to remortgage explains how this fits into the wider process.

It’s also worth checking your current mortgage statement for your exact outstanding balance, since overpayments, or simply time passing, mean the figure is often lower than when you last checked.

Does more equity always mean a better deal?

Generally, more equity, meaning a lower LTV, widens your choice of lenders and improves the rates on offer, since lenders price risk in LTV bands. But it isn’t a straight line all the way: many lenders offer their most competitive pricing once you reach particular thresholds, often around 60% or 75% LTV, rather than every extra percentage point making an equal difference. This is illustrative rather than a fixed rule, since bands vary by lender, but it’s part of why comparing whole-of-market deals matters more than simply aiming for “as much equity as possible.”

What if you have little or no equity?

If your LTV is high, meaning you have relatively little equity, your choice of remortgage deals narrows. Some lenders don’t offer their full range at very high LTV, and rates at higher LTV bands are often less competitive. It doesn’t mean remortgaging is impossible, but it does mean the field of lenders willing to consider you shrinks. In this situation, a product transfer with your existing lender, where you’re not borrowing more, is worth comparing, since FCA rules allow lenders to move existing customers onto a new deal without a full affordability reassessment where the balance isn’t increasing.

What is negative equity and can you remortgage with it?

Negative equity means your outstanding mortgage balance is higher than your property’s current value, which can happen if house prices fall or if you’re on an interest-only mortgage without enough capital repayment. Remortgaging to a new lender in negative equity is generally very difficult, since there’s no equity for a new lender’s LTV calculation to work with. Your existing lender may still be able to help, for example through a product transfer, since they already hold the loan and aren’t taking on a new LTV risk in the same way. It’s worth speaking to your current lender directly if you’re concerned about this.

Remortgaging with low equity and bad credit

If you’re dealing with both a smaller amount of equity and something on your credit file, such as a CCJ, defaults, or missed payments, the two factors compound rather than cancel out. A high LTV already narrows your options, and adverse credit narrows them further, since some lenders that do offer higher LTV deals are more cautious about credit history at the same time.

This combination is exactly the kind of situation where comparing whole-of-market options matters, rather than assuming any single lender’s answer applies everywhere. Our remortgage with low credit score page covers how credit score and LTV interact in more detail.

What this means if you’re remortgaging with adverse credit

If your equity is limited and your credit file isn’t clean, get a realistic picture of both before you start comparing deals: a recent valuation estimate for your equity position, and your statutory credit report for what a lender will see. Being upfront about both with a specialist adviser means they can focus on lenders genuinely likely to consider your circumstances, rather than options that look promising on paper but rule you out on LTV or credit criteria. If existing debts are adding pressure alongside limited equity, free advice from MoneyHelper is worth exploring too.

For how a valuation fits into the remortgage process itself, see do you need a valuation to remortgage, and for more on borrowing against your equity, see how releasing equity through a remortgage works.