Remortgage · Mortgage
Remortgage and £95,000 capital raise for a homeowner coming off a five-year fix
A homeowner reaching the end of a five-year fixed rate wanted to remortgage and raise additional capital for a significant extension. We reviewed the full market, modelled whether staying with the existing lender or switching made financial sense, and executed the capital raise on the best available terms.
Reviewed by Jack Cousins · CeMAP qualified
1 February 2025
The Situation
Our client had been on a five-year fixed rate for the past five years and was approaching the end of her deal. She owned a four-bedroom house that had increased significantly in value over the period — her original 80% LTV had fallen to approximately 55% — and she wanted to raise £95,000 to fund a rear extension and loft conversion. She was self-employed and had two years of strong accounts. Her existing lender had offered to retain her on a new fixed rate and allow a capital raise, but she wanted to be certain that was the right outcome.
The Challenge
The question here was not whether she could remortgage — with a 55% LTV, clean credit and two years of solid self-employed accounts, she had access to most of the market. The question was whether the existing lender's retention offer was genuinely competitive. Product transfer rates are not always the same as the rates available on the open market, and the capital raise terms, valuation requirements and early repayment charge structure on a new product all needed to be evaluated against the switching cost. For self-employed clients, the income assessment methodology also varies between lenders — some would assess her more favourably than others on the same income figure.
Our Approach
We conducted a full market review, comparing the existing lender's retention offer against the best available rates on the open market for her LTV and self-employed income profile. We modelled the total cost of each option over the new fixed term, including any arrangement fees and valuation costs. The open market produced a materially better rate, and the self-employed income assessment at the most favourable lender was also more generous — which had implications for how the capital raise was structured.
The Outcome
The client remortgaged to a new lender at a lower rate than the retention offer, with the £95,000 capital raise included. The lower rate more than offset the switching costs within the first eight months of the new deal. The extension is underway.
Outcome
The client remortgaged to a new lender at a lower rate than the retention offer, with the £95,000 capital raise included. The lower rate more than offset the switching costs within the first eight months of the new deal. The extension is underway.
This case study is anonymised. The outcome shown is specific to this client's individual circumstances and is not indicative of results in other cases. Your mortgage is not guaranteed until a formal offer is issued. Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage. Lockhart Murphy Ltd is authorised and regulated by the Financial Conduct Authority.
- remortgage
- capital raise
- self-employed
- product transfer
- home improvements
- five-year fix
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