How Much Equity Do You Need to Remortgage in the UK? (2025 Guide)

You want a lower payment or cash to finish the kitchen, but you’re stuck on one big question: how much equity do you actually need to remortgage? Here’s the short answer: many UK lenders in 2025 will consider you with as little as 10% equity (90% LTV). Better deals kick in as your equity grows, with the sharpest rates around the 40% equity mark (60% LTV) and below. The right target depends on your goals-cutting your rate, borrowing more, consolidating debt, or switching off a punishing SVR.

I’ll show you the equity thresholds lenders care about, how to calculate your equity and LTV in minutes, what to do if you’re short, and where the break‑even line sits once fees are in the mix. No fluff-just the steps and numbers you need to make a smart call.

remortgage equity

What you probably want to get done right now:

• Figure out your real equity and LTV quickly.
• See if you can remortgage with your current equity.
• Know what equity bands unlock lower rates and better terms.
• Decide whether to wait, overpay, or switch now (with a clear break‑even).
• Understand options if you’ve got thin equity, bad credit, or a tricky property.

TL;DR: The short answer on equity for remortgaging in 2025

• Minimum equity: Most mainstream lenders will look at remortgages up to 90% LTV (so ~10% equity). Availability tightens if you’re borrowing extra or consolidating unsecured debt.
• Where the best pricing starts: 60% LTV (40% equity) and below. The next common price bands are 75%, 80%, and 85% LTV.
• Debt consolidation: Often capped at 80-85% LTV. Some lenders price this higher than a standard like‑for‑like remortgage.
• Cash out / further borrowing: Tends to be easier and cheaper under 75-80% LTV. Over 85% LTV, expect fewer options.
• Quick rule: If you’re near a lower LTV band (e.g., 86% → 85%, 76% → 75%, 61% → 60%), a small overpayment or waiting for a valuation bump can pay off fast.

Why trust this? Lenders price by LTV bands because risk rises as equity falls. That hasn’t changed. Moneyfacts and UK Finance data through 2024-2025 show consistent product clustering at 60%, 75%, 80%, 85% and 90% LTV bands. The FCA’s MCOB rules keep affordability front and centre, so income, credit, and property type still matter alongside equity.

Work out your equity and LTV in 3 minutes (with examples)

This is the foundation. If you know your LTV, you’ll know what tier of deals you’re likely to get.

1. Estimate your current property value

   • Use at least two sources: a quick AVM (e.g., from a major portal) and recent sold prices on your street. If you’re borderline on a band (like 75% vs 76% LTV), a formal valuation at application can help.

2. Find your current mortgage balance

   • Log into your lender’s app or your latest statement. Use the redemption figure if you’re very close to switching (it includes a few days of interest).

3. Calculate equity and LTV

   • Equity (£) = Property value − Mortgage balance
   • LTV (%) = Mortgage balance ÷ Property value × 100

4. Check your band

   • Common bands: 60%, 75%, 80%, 85%, 90%. Lower LTV = stronger pricing and more product choice.

Example A (standard remortgage): Value £350,000, balance £245,000 → LTV = 245,000 ÷ 350,000 = 70%. You’re in the 70-75% band. You’ll usually see good choice and sharper rates than 80%+ LTV.

Example B (tight equity): Value £300,000, balance £270,000 → LTV = 90%. That’s likely the upper limit. Options exist, but fewer, and pricing is less friendly. A small valuation uplift or overpayment to get to 89% could widen your choices.

Example C (prime tier): Value £500,000, balance £280,000 → LTV = 56%. You’re under 60%-this is where lenders tend to put their best rates and lowest stress.

Pro tips:

• Borderline? Ask a broker whether your property type/street is valuing higher right now. An extra 1-2% on the valuation can move you down a band.
• If you plan to borrow more (e.g., £20k for works), recalc your LTV including the new total balance.
• Keep an eye on fees. A higher rate with a low fee can beat a lower rate with a chunky fee at smaller loan sizes.

What lenders want in 2025: equity bands, use‑cases, and fees

Lenders are still anchored to LTV bands, but what you want to do with the remortgage matters. Here’s a quick map of how equity plays out by use‑case.

Notes on 2025 market texture:

• Price bands: Moneyfacts 2025 product snapshots still show heavy clustering at 60%, 75%, 80%, 85%, and 90% LTV. Lenders reward bigger equity with lower rates and fees.
• Debt consolidation: UK lenders often cap this at 80-85% LTV and may add a pricing premium. Be ready to document debts and close accounts after completion if required.
• Property type: New‑builds and high‑rise flats can face stricter LTV caps. Listed buildings, thatched roofs, or non‑standard construction can also tighten criteria.
• Credit: Recent missed payments, high card utilisation, or payday loans can push you to lower LTV caps even if you’ve got the equity on paper.
• Affordability: The FCA’s MCOB rules keep lenders focused on whether you can repay under stress. If your income has dipped, a product transfer with your current lender might beat a full remortgage for now.

Fee math that actually matters:

• Typical lender fees: £999-£1,999 (or a % fee on some premium products). Add valuation and legal (many remortgages include free legal and a basic valuation, but not all).
• Break‑even months = (Total fees added or paid upfront) ÷ (Monthly saving vs your current deal).
• If you’ll move or remortgage again soon, a lower fee deal can win- even at a slightly higher rate.

Real‑world scenarios: see what your equity unlocks

Here are common paths I see homeowners take, and how equity changes the move.

1) You’re rolling off a fixed rate to SVR

• If you’re above 85% LTV, apply early (4-6 months out) to secure a rate while you still have time to tweak equity with overpayments or challenge a low valuation.
• If you’re under 60% LTV, you’re in pole position-focus on total cost (rate + fees), not just the headline APR.

2) You want to borrow more for home improvements

• Under 75-80% LTV: usually smooth, and pricing remains competitive. Lenders like adding value to the property.
• Above 85% LTV: options thin out. Consider a smaller initial release and a second tranche after works increase your value, or use a short 0% purchase card for materials and keep the mortgage LTV lower.

3) You’re consolidating high‑cost debt

• Keep it under 80-85% LTV if you can. Lenders often cap consolidation here and may insist you close the accounts you roll in.
• Run the numbers hard: rolling short‑term debt into a 20-30 year term can cost more interest in the long run. Consider a shorter mortgage sub‑term for the consolidated chunk.

4) Your house price dipped and equity is tight

• Borderline at 90% LTV? Ask your broker about lenders with more flexible valuations or desktop AVMs that reflect current sales in your exact area.
• Can’t reach 90%? Product transfer with your current lender can bridge the gap until equity rebuilds.

5) You’re aiming for a lower LTV band fast

• Targeted overpayments: If you’re at 76% LTV on a £300k home, you need about £3k to hit 75% (assuming a £225k balance). Small moves can unlock better pricing.
• Do not drain your emergency fund to shave 0.1% off. Keep 3-6 months’ expenses in cash.

6) Credit blips

• One late payment in the last 12 months? Some mainstream lenders may accept it at lower LTVs with a solid explanation.
• Multiple blips or recent defaults? Specialist lenders may want more equity (e.g., ≤75-80% LTV) and will price accordingly. Clean up utilisation and remove errors before applying.

Worked example: overpay or not?

• You’re at 76% LTV with a £240,000 balance on a £315,789 valuation. To hit 75% LTV, you need to reduce the balance to £236,842-about £3,158.
• Say the 75% LTV deal saves you £38/month vs the 80% band deal, and fees are the same. Break‑even: £3,158 ÷ £38 ≈ 83 months. That’s long. If the monthly saving is £65, break‑even drops to ~49 months. Ask your broker to model real deals before you move cash.

Worked example: fees vs rate

• Loan £180,000. Deal A: lower rate + £1,999 fee. Deal B: slightly higher rate + £0 fee.
• If Deal A saves £28/month vs Deal B, break‑even is 1,999 ÷ 28 ≈ 71 months. If you plan to switch in 24-36 months, Deal B could be smarter.

Important edge cases:

• Help to Buy equity loans: Remortgaging gets more complex-often capped LTVs and paperwork. Specialist advice helps.
• Leasehold with a short lease: Low remaining years can crush valuation and push LTV up. Consider extending the lease first if feasible.
• Self‑employed: Solid two years of accounts helps. With thin equity, any income gaps can be the difference between an offer and a decline.

Checklist, mini‑FAQ, and your next steps

Quick checklist before you apply:

• Calculate your LTV and note which band you’re in (60%, 75%, 80%, 85%, 90%).
• Decide your goal: lower payment, shorten term, borrow more, consolidate, or exit SVR.
• Collect documents: last 3 months’ payslips (or SA302s + tax year overviews for self‑employed), last 3 months’ bank statements, ID, and latest mortgage statement.
• Check credit: fix errors, lower card balances, avoid new credit in the weeks before you apply.
• Run fee math: compare total cost, not just rate. Know your break‑even months.
• Time it: apply 4-6 months before your fix ends to avoid SVR and give space to resolve valuation issues.

Mini‑FAQ

• What’s the minimum equity to remortgage? Around 10% equity (90% LTV) with some lenders. Choice is narrower and pricing is steeper here.
• Do I need a deposit to remortgage? No. Your equity is your deposit. But a small overpayment can act like one if you’re just above a band.
• Can I remortgage at 95% LTV? Rare for full remortgages. If you’re at 95% LTV, look at a product transfer with your current lender while you build equity.
• Is it cheaper to stay with my lender? A product transfer is quick and fee‑light, and it ignores some affordability hurdles. But it might not be the cheapest over the full term. Compare both.
• Do valuations come in low? It happens. You can often provide comparables and request a reconsideration, or try a lender whose valuation model fits your area better.
• Can I add fees to the loan? Usually yes, but it raises your LTV and you’ll pay interest on the fee. Add to loan only if cash is tight and the total cost still works.
• How does bad credit affect equity needs? Lenders may cap your LTV lower. With blips, 75-80% LTV can be the practical ceiling.

Next steps by situation

• I’m under 60% LTV: Focus on total cost. Consider shorter terms or overpayments to kill interest while rates are decent.
• I’m 60-75% LTV: Strong spot. Shop hard across lenders; pricing and incentives differ. Watch fee structures.
• I’m 75-85% LTV: Compare both mainstream and a few flexible lenders. If you’re near 75%, consider a small overpayment.
• I’m 85-90% LTV: Apply early. Expect tighter criteria. If adding borrowing, sense‑check whether it’s worth waiting to drop below 85%.
• I’m over 90% LTV: Look at a product transfer or a short wait/overpay plan. Re‑check valuations in 3-6 months.

Troubleshooting

• Low valuation came back: Provide three recent, nearby sold comparables with similar size/condition. Ask for a review. If no joy, try a lender with a different valuer panel.
• Affordability shortfall: Reduce unsecured outgoings, clear small balances, consider a longer term (you can overpay later), or use a product transfer to bridge until income rises.
• Debt consolidation declined at your target LTV: Lower the amount to fit under the lender’s cap, or separate the remortgage and handle part of the debt with a shorter unsecured plan.
• ERC overlap (your fix hasn’t ended): Ask about future‑dated completion. Many lenders will let you secure a deal now and complete when your ERC ends.
• Self‑employed variance in income: Some lenders average 2 years, others take the latest year if higher. A broker can place you with the right policy to keep your LTV band workable.

Credibility notes (no links, so you can Google them if you want): The FCA’s MCOB rules shape how lenders test affordability. Moneyfacts product data in 2024-2025 shows LTV‑banded pricing and incentives are still the norm. Bank of England and UK Finance reports confirm lenders’ risk focus on higher LTVs, which is why those bands matter so much for your rate.