There is no single equity figure that every homeowner must have before they can remortgage. In the UK, the amount you need depends on the lender, your circumstances, the property, and whether you are simply switching the existing balance or borrowing more. Some borrowers may be able to remortgage with only 5% to 10% equity, while having 15% to 25% or more can give access to a wider range of products.
The key number is your loan-to-value ratio, or LTV. Lenders compare your mortgage balance with the current value of your home. The lower your remortgage LTV, the larger your equity stake and, generally, the more options you may have.
How equity and LTV work when you remortgage
Home equity is the difference between your property’s current value and the amount you still owe. If your home is worth £300,000 and your mortgage balance is £240,000, you have £60,000 of equity. Your LTV is 80%, because the mortgage represents 80% of the property’s value and your equity represents the remaining 20%.
You calculate LTV by dividing the mortgage balance by the property’s estimated value and multiplying by 100. Lenders commonly arrange products around LTV bands such as 60%, 75%, 80%, 85%, 90% and 95%, although the exact bands and availability vary. This means the equity needed to remortgage is usually more useful as a percentage than as a fixed cash amount.
What is the minimum equity needed to remortgage?
It can be possible to remortgage with around 5% equity, equivalent to 95% LTV, but high-LTV options are more limited. Some lenders currently allow like-for-like remortgages up to 95% LTV, while using lower maximums when the borrower wants additional funds. Criteria and product availability can change, so a 95% LTV remortgage should not be treated as guaranteed.
Reaching 10% or 15% equity can make a meaningful difference because it moves the mortgage into roughly the 90% or 85% LTV range. At 20% equity, the LTV is about 80%, while 25% equity corresponds to around 75% LTV. Lower LTV bands often come with broader product choice and may offer better pricing, although fees and the total cost of the deal still matter.
Why LTV bands matter more than the raw equity figure
Two homeowners can have very different amounts of equity in pounds but fall into the same LTV band. A borrower with £30,000 equity in a £150,000 home has the same 80% LTV as someone with £100,000 equity in a £500,000 home. From the lender’s perspective, the percentage is often more important than the cash amount.
This also means a relatively small repayment can sometimes move you into a better band. Our guide to calculating your mortgage LTV is a useful next step if you want to check where you currently sit.
A practical example
Suppose your home is valued at £275,000 and you owe £226,000. Your LTV is about 82.2%, leaving roughly 17.8% equity. If you reduced the balance to £220,000, the LTV would fall to exactly 80%. If a lender offers more competitive products at 80% LTV, that reduction could improve your choices. Before using savings, compare the potential benefit with any early repayment charge and the fees on the new mortgage.
What if the lender values your home differently?
Your own estimate of the property’s value is not necessarily the figure a new lender will use. The lender normally relies on its own valuation. If the valuation is lower than expected, your calculated equity falls and your LTV rises.
For example, a £240,000 mortgage against a £300,000 home is 80% LTV. If the lender values the property at £285,000 instead, the LTV rises to about 84.2%. That could place the application in a different pricing band. If you believe a valuation is too low, ask whether the lender has a reconsideration process and what evidence it accepts.
Do you need more equity to release cash?
Often, yes. Remortgaging to raise extra money increases the new mortgage balance and therefore the LTV. Lenders may also set a lower maximum LTV for additional borrowing than for a simple like-for-like switch.
If a home is worth £300,000 and the existing mortgage is £180,000, the current LTV is 60%. Increasing the mortgage to £225,000 to release £45,000 would raise the LTV to 75%. The lender would assess the larger loan, the reason for the extra borrowing and whether the repayments are affordable. Our guide to remortgaging to release equity explains the wider costs and trade-offs.
Equity is not the only eligibility test
A strong equity position does not guarantee approval. A new lender can also assess income, regular spending, existing debts, credit history, mortgage payment record, the requested term and the property itself. A drop in income may restrict borrowing even if your home equity is high.
If you are in negative equity, meaning the mortgage balance exceeds the property’s value, switching lender is usually difficult. A product transfer with your existing lender may be worth exploring.
How to improve your position before remortgaging
Check your current mortgage balance and obtain a realistic estimate of your home’s value, then calculate your LTV. If you are close to the next lower band, work out whether an overpayment could move you across it without creating a larger cost through early repayment charges or lost savings.
Keep mortgage and other credit payments up to date, avoid unnecessary new borrowing before applying, and prepare evidence of income and regular commitments. Researching options several months before your deal ends also gives you time to handle valuation or affordability issues. Our guide to preparing for a remortgage can help with the practical checks.
Frequently asked questions
Can I remortgage with 10% equity?
Potentially, yes. Ten per cent equity is roughly 90% LTV, and remortgage products can be available at that level. Approval still depends on the lender’s criteria, affordability, credit record and property.
Is 20% equity enough to remortgage?
Twenty per cent equity means about 80% LTV if the lender agrees with your property valuation. That can provide more choice than a higher-LTV application, but it does not guarantee a specific rate or approval.
Do I need more equity if I want to borrow extra?
You may do. Raising additional money increases the new mortgage balance and LTV, and some lenders impose lower LTV limits for capital-raising remortgages.
What if I do not have enough equity to switch lender?
You can check whether an overpayment would move you into an acceptable LTV band or ask your current lender about a product transfer. If you are in negative equity or struggling with payments, consider regulated mortgage or debt advice before increasing borrowing.
Conclusion
You do not necessarily need a large equity stake to remortgage, but LTV has a major influence on deal access. Around 5% to 10% equity can sometimes be enough, while 15% to 25% or more generally places you in lower LTV bands with wider choice. Use a realistic property value, check the next LTV threshold, and consider affordability, fees and the purpose of any extra borrowing alongside the equity figure.