For many UK homeowners, their property is not just a home but also a valuable financial asset. With rising house prices, a significant portion of wealth is tied up in property equity. When extra funds are needed — for retirement, home improvements, or family support — homeowners often face the choice of equity release or remortgage equity. Knowing the differences between these options is key to making the right financial decision.
How Remortgaging Works
Remortgaging means switching your mortgage to a new deal, either with your current lender or a new one. Many homeowners do this simply to secure a better rate once their existing deal ends, but it can also be used as a way to raise cash.
By borrowing more than your current mortgage balance, you can release a portion of your home’s equity as a lump sum.
Benefits of remortgaging include:
Lower interest rates compared with loans or credit cards
Predictable monthly repayments
Ability to spread repayments over a long term, making it easier to manage day-to-day budgets
However, there are downsides to consider. The loan must be repaid in full, including interest, over the term of the mortgage. Extending the term may reduce monthly payments but usually increases the total amount repaid in the long run. Lenders will also carry out full affordability checks, reviewing your income, spending, credit commitments, and overall financial stability.
How Equity Release Works
Equity release is designed for older homeowners — usually aged 55 and above — who want to access some of their property wealth without the need for monthly repayments.
The most common type is a lifetime mortgage. This allows you to borrow against your home while retaining full ownership. Interest rolls up over time and is repaid, along with the loan, when the property is eventually sold — usually when the homeowner passes away or moves into long-term care.
Why homeowners consider equity release:
No mandatory monthly repayments
No affordability checks
Funds can be taken as a lump sum, in flexible drawdowns, or a combination
Can provide financial stability for retirees with limited income
But there are important trade-offs. Because interest compounds, the loan can grow quickly, reducing the value of the estate left to loved ones. Modern plans include safeguards, such as the no negative equity guarantee, but releasing equity still means giving up a portion of your future property value.
Which Option Suits Which Borrower?
Choosing between equity release and remortgaging depends on personal circumstances — particularly age, income, future goals, and family considerations.
If you’re still working, with stable income, a remortgage may be the more suitable way to access funds while keeping future options open.
If you’re retired, with less income flexibility, the ability to access money without monthly repayments may make equity release more appealing.
Both solutions can be used for similar purposes — home improvements, supplementing retirement income, or helping children with a house deposit — but each has different implications for inheritance, borrowing capacity, and long-term costs.
The Importance of Professional Advice
Deciding whether to remortgage or release equity is not just a financial decision — it’s also personal. It involves thinking about your long-term plans, your family, your retirement lifestyle, and the legacy you want to leave.
That’s why professional, FCA-regulated advice is essential.
A qualified adviser can help you understand:
The full costs and charges involved
Benefits and risks
How each option may affect your estate and future plans
Safeguards and protections available
Which solution best aligns with your goals
With the right guidance, you can make a confident and informed decision.
Which Option Is Right for You?
At IMC Financial Services, we take the time to understand your needs and guide you with confidence.
Whether you want to unlock cash, restructure borrowing, or simply explore your options, we’re here to help you make the right choice for your circumstances.