Do you need a valuation to remortgage?

Yes, in most cases a lender needs to value your property before offering a remortgage, since the value determines your loan to value (LTV) and affects which deals are available to you. Many remortgages today use a desktop valuation, based on data rather than a physical visit, and this is often provided free as part of the deal, so you may not notice it happening at all.

Why do lenders need a valuation?

A lender uses the valuation to work out your loan to value (LTV), which is your mortgage amount divided by your property’s value. For example, £150,000 borrowed on a £250,000 home is 60% LTV. Lenders price deals and set criteria in LTV bands, often in 5% steps, so an accurate valuation matters for working out which deals you can access.

If your property is worth less than expected, your LTV will be higher than planned, which can narrow your options or change the rate offered. If it is worth more, you may move into a lower LTV band, which can widen your choices. Our guide on how LTV affects a bad credit remortgage explains this further.

Desktop valuation or physical survey?

Which type applies to you depends on the lender and your property, and you do not usually need to choose. The lender decides based on what it needs to make a lending decision.

Does a mortgage in principle use a valuation?

A mortgage in principle, sometimes called an agreement in principle, gives an early indication of what a lender might lend based on your income, outgoings and a credit check, often before a full valuation takes place. It is not a formal offer, and the figure can change once the lender has valued your property and completed its full assessment. Treat a mortgage in principle as a helpful early guide rather than a guarantee, since the valuation stage can still affect what is ultimately offered.

What if the valuation comes back lower than expected?

Sometimes a valuation comes in below what you expected, which can happen for various reasons, such as recent local sales data, the property’s condition, or general market movement. If this happens:

• Your LTV will be higher than planned, which may reduce the deals available to you or change the rate offered.
• You may be able to challenge the valuation with evidence, such as details of recent comparable sales, though the lender decides whether to reconsider it.
• You could reduce the amount you want to borrow to keep your LTV in a more favourable band, if that is affordable for you.
• You could compare offers from other lenders, since valuations can vary between valuers and methods.

Getting a realistic sense of your property’s value before you apply, for example by checking recent sale prices of similar homes nearby, can help you avoid surprises. It is also worth checking your figures with more than one lender or adviser where possible, since valuation methods and outcomes are not always identical.

What can you do to prepare for a valuation?

While you cannot usually influence a desktop valuation, since it relies on data rather than an inspection, there are a few sensible steps if a physical survey is likely:

• Make sure the property is accessible and any obvious issues, such as a leaking roof or damp, are addressed where possible before the visit.
• Have details ready of any improvements you have made, such as an extension or a new kitchen, as these can be relevant to value.
• Check recent sale prices of comparable properties nearby, so you have a realistic expectation of what the valuation might show.
• Ask your lender or adviser what happens next if the valuation comes back different from what you expected, so there are no surprises later in the process.

Does a valuation cost extra?

Many lenders include the valuation free as part of a standard remortgage package, particularly where a desktop valuation is used. A physical survey, where needed, is more likely to carry a separate fee, though this varies between lenders. Our guide on how much it costs to remortgage covers this alongside the other costs involved in remortgaging.

What this means if you have little equity or adverse credit

If you have little equity in your home, an accurate valuation matters even more, since a small change in value can move you between LTV bands and affect what is available. Our guide on remortgaging with little equity covers this in detail.

Adverse credit does not usually change how a valuation itself is carried out, but it can interact with your LTV in how lenders view your application overall. Some lenders that specialise in adverse credit set their own maximum LTV for different types of credit issue, so a lower LTV, supported by an accurate valuation, can sometimes widen your options. If you are considering borrowing more against your home, for example to release equity or to consolidate debts, remember that this increases what is secured against your home, so read our guide on debt consolidation remortgages if that applies to you, and consider free, impartial advice from MoneyHelper or StepChange if you are struggling with debt.