Home improvements are one of the most common reasons people release equity, and often one of the more straightforward purposes for a lender to understand, even where the applicant has adverse credit. You are usually asked what the work involves and may need to show quotes, but the purpose itself is rarely a barrier on its own. What tends to matter more is the same as any raise-capital remortgage: the loan to value a lender will allow given your credit history, and whether the larger mortgage is affordable.
This page looks at what lenders typically want to see for improvement work specifically, and the practical risks of borrowing against your home to pay for it. For the wider mechanics of releasing equity, including how the amount is worked out, see releasing equity with bad credit.
On this page
This page covers
- Reason for remortgaging
- Raising moneyBorrowing more increases your loan to value, which can change the options available.
Read the main guide: Remortgaging to release equity when you have bad credit
In short
- Home improvements are usually one of the purposes lenders find easiest to understand, even with adverse credit.
- Some lenders may ask for quotes or a schedule of works, particularly for structural projects.
- How much the work might add to your home’s value is a separate question from how much you can borrow.
- Unfinished or over-budget projects can leave you with a larger mortgage and no matching increase in equity.
Your home may be repossessed if you do not keep up repayments on your mortgage. Think carefully before securing other debts against your home. Borrowing over a longer term can mean paying back more in total.
Why lenders often find home improvements straightforward
Unlike consolidating debt or lending to someone else, home improvement borrowing is spent on the security itself. That tends to make lenders comfortable with the purpose, since the money is going back into the property rather than away from it. It does not, however, change how your adverse credit and affordability are assessed. Bad credit still affects the maximum LTV a lender allows and how closely your application is checked.
The type of work can still matter. Cosmetic projects, such as a new kitchen or bathroom, are usually treated more simply than structural work like an extension or loft conversion, which can involve building control, planning permission and a valuer looking at the plans rather than just the current state of the house.
What might a lender ask for?
What is requested varies between lenders and the scale of the work, but you may be asked for some or all of the following before the extra borrowing is released.
| Type of work | What may be asked for |
|---|---|
| Kitchen, bathroom, decorating | Often just confirmation of the purpose; may not need quotes |
| Extension or loft conversion | Builder’s quotes, planning permission or building regulations sign-off |
| New windows, roof, boiler | Quotes and sometimes an energy performance consideration |
| Garden works, driveway | Usually treated similarly to cosmetic work |
Illustrative examples only. What is actually required is set by each lender, not by any fixed rule.
Some lenders release the money in one payment on completion; others release it in stages for larger projects, checking progress along the way.
Will the work add enough value to justify the borrowing?
This is a separate question from what the lender will allow you to borrow, and it is worth thinking through carefully. Some improvements, particularly extra bedrooms or bathrooms, tend to add more value relative to their cost than others, such as very high-specification finishes. A local estate agent or surveyor can give a rough view, though valuations depend on comparable sales in your area, and a low valuation can affect the amount available even after work is complete.
It is common for improvement costs to exceed the value they add, especially once fees, VAT and unexpected costs are included. That does not make the borrowing wrong, but it does mean the work should usually be judged on whether you want to live with the result, not purely as an investment.
What if the project costs more or takes longer than planned?
Once the remortgage completes, the extra amount is set. If costs rise during the project, you may need to fund the difference yourself, delay parts of the work, or apply for further borrowing later, which means a further credit and affordability check.
- Build in a contingency when working out how much to ask for, rather than borrowing the exact quoted figure.
- Get more than one quote where possible, so the figure you borrow is realistic rather than optimistic.
- Keep paperwork for the work carried out, in case a future lender or valuer asks about it.
- Avoid starting structural work before the extra borrowing has actually completed.
Are there alternatives to a remortgage for funding improvements?
A remortgage is not the only route. A further advance from your current lender can avoid early repayment charges if your existing deal has not ended, and some people compare an unsecured home improvement loan for smaller projects, which does not add to what is secured against the property but is usually repaid over a shorter term at a different rate.
What may affect releasing equity for home improvements
| Factor | Why it matters |
|---|---|
| Scale and type of work | Structural projects are often looked at more closely than cosmetic work such as decorating or a new kitchen. |
| Quotes or a schedule of works | Some lenders ask for these before releasing funds for larger projects. |
| Planning permission or building regulations | May be required before a lender releases money for structural changes. |
| Maximum LTV for your credit profile | Adverse credit can mean a lower maximum LTV, which limits how much you can raise regardless of the project cost. |
| Affordability of the larger mortgage | The new borrowing has to be affordable over the whole term, not just cover the immediate cost of the work. |
| Whether funds are released in stages | Some lenders release money for larger projects in stages rather than as a single sum. |
| Timing against your current deal | Leaving a deal early to release equity sooner can trigger early repayment charges. |
These are general points, not lender rules. Each lender sets and changes its own criteria.
Information an adviser may ask for
You don’t need all of this to make an enquiry. It helps to know where to find it, because an adviser is likely to ask about most of it.
- A description of the work and, where possible, quotes or estimates
- Planning permission or building regulations documents, if relevant
- Your current mortgage balance, deal end date and any early repayment charges
- An estimate of your property’s current value
- Your credit reports from Experian, Equifax and TransUnion
- Proof of income and your main monthly outgoings
Frequently asked questions
Do I need planning permission before I can release equity for an extension?
Not always at the point of applying, but some lenders may want to see permission or building regulations sign-off before releasing money for structural work. An adviser can tell you what a particular lender expects for your project.
Can I release equity for home improvements if I have a CCJ or default?
It can still be possible. The purpose itself is usually straightforward, but the credit issue affects the maximum LTV a lender allows and how closely the application is checked. See releasing equity with a CCJ or with defaults.
Will home improvements definitely increase my home’s value?
Not necessarily by as much as they cost. Some improvements add more relative value than others, and valuations depend on comparable sales in your area. Treat any estimate as a guide, not a guarantee.
Is a further advance cheaper than a remortgage for funding improvements?
It depends on your current deal and the rates available. A further advance can avoid early repayment charges if your deal has not ended, but it is a separate product from your main mortgage. Our guide on what is a further advance? explains how it works.