Whether you are planning a loft conversion, a new kitchen, or energy-saving upgrades, finding the right way to fund home improvements is one of the most important decisions you will make. Funds can generally be used for any improvement, from decorating to major structural work, and there are more options available than most homeowners realise.
This guide covers every mainstream route available in the UK, including remortgaging for home improvements, secured and unsecured loans, credit cards, and government grants, so you can choose the one that fits your project, your budget, and your circumstances.
Table of Contents
Your Options at a Glance
Option | Best for | Typical borrowing | Typical term | Key risk |
Remortgage / equity release | Large projects, homeowners with equity | £25,000-£250,000+ | 5-25 years | Property at risk |
Secured home improvement loan | Large projects, lower rates needed | Up to £250,000 | 1-25 years | Property at risk |
Unsecured personal loan | Smaller projects, fast access | Up to £50,000 | 1-7 years | Higher interest rate |
0% purchase credit card | Small, fast projects | £500-£10,000 | 3-20 months | Rate jumps after promo period |
Second-charge mortgage | Large amounts without remortgaging | £10,000-£250,000+ | 5-25 years | Property at risk |
Home improvement grant | Eco upgrades, low-income households | Varies | N/A | Eligibility criteria apply |
Cash savings | Any project | As available | N/A | Depletes emergency fund |
Remortgaging to Fund Home Improvements
Remortgaging is one of the most popular ways to fund significant home improvements in the UK. If you have built up equity in your property, i.e., the difference between what it is worth and what you still owe, you may be able to release equity from your home by switching to a new mortgage deal with a higher loan amount.
How it works
When you remortgage for home improvements, your new mortgage replaces your existing one. You borrow more than your outstanding balance and receive the difference as a lump sum, which you then use to fund the work.
At a glance:
- Borrow from £25,000 upwards, subject to your available equity and lender criteria
- Repay over the remaining term of your mortgage (potentially 5-25 years)
- Rates tied to your loan-to-value ratio, typically lower than unsecured borrowing
Pros:
- Access to larger sums at lower interest rates than personal loans
- One monthly payment alongside your existing mortgage
- Potential to improve your property value, increasing your equity further
Cons:
- Property is used as security, missed payments put your home at risk
- Arrangement fees, valuation costs, and solicitor fees apply – see our guide to remortgage fees and costs
- Takes longer to arrange than an unsecured loan, typically 4-8 weeks. Read more about how long a remortgage takes
If you are currently mid-deal, you may also want to consider a cashback remortgage, which can return a lump sum at completion.
Secured Home Improvement Loans
A secured home improvement loan is a separate borrowing product secured against your property, so it runs alongside your existing mortgage rather than replacing it.
Second-charge mortgages
A second-charge mortgage is the most common form of secured home improvement loan. It sits behind your primary mortgage in priority order, which means it typically carries a slightly higher rate than a standard remortgage, though still lower than an unsecured loan.
At a glance:
- Borrow up to £250,000 or more, subject to available equity
- Repay over 5-25 years
- Does not affect your existing mortgage deal or trigger early repayment charges
Pros:
- Useful if your current mortgage has high early repayment charges
- Larger sums than most unsecured products
- Longer repayment terms reduce monthly payments
Cons:
- Property is at risk if payments are missed
- Interest rates are higher than a first-charge remortgage
- Additional lender fees and legal costs apply
Unsecured Personal Loans
An unsecured personal loan is a home improvement loan that is not secured against your property. It is the quickest route to funding for projects up to £50,000, and approval can sometimes be same-day.
At a glance:
- Borrow up to £50,000, depending on your credit history
- Fixed monthly repayments over 1-7 years
- No charge on your property
Pros:
- No risk to your home
- Fast to arrange, often within 24 hours
- No valuation or legal fees
Cons:
- Higher interest rates than secured borrowing
- Lower borrowing limits
- Monthly repayments may be higher than a secured equivalent
Common UK lenders for unsecured home improvement loans:
Lender | Max borrowing | Key feature |
NatWest | £50,000 | Online application, fast approval |
Nationwide | £50,000 | 1-10 year terms |
Lloyds Bank | £50,000 | Personalised quotes, fast funding |
Tesco Bank | £35,000 | Fixed monthly repayments |
Santander UK | £25,000 | Available for improvements that add value |
It is strongly recommended that you obtain quotes from your contractor before applying, so you borrow only what you need.
Purchase Credit Cards
A 0% purchase credit card offers an interest-free window, typically 3 to 20 months, during which you can spend on improvements and pay nothing in interest, provided you clear the balance before the promotional period ends.
At a glance:
- Spend up to your credit limit (often £500-£10,000 for new applicants)
- 0% interest for 3-20 months
- Standard APR applies after the promotional period
Pros:
- No interest if repaid within the promotional period
- Immediate access to funds
- No risk to your property
Cons:
- Not suitable for large projects
- Standard APR (often 20-30%) kicks in if the balance is not cleared
- Approval depends on your credit score
Best suited to smaller, fast-paced projects (a bathroom refresh, new flooring, or garden landscaping) where costs can be paid off within the promotional window.
Home Improvement Grants
Free or subsidised funding is available to some UK homeowners, particularly for energy-efficiency upgrades.
Government energy grants
The UK government and devolved administrations periodically offer grants for eco-friendly home improvements. These have included support for insulation, heat pumps, solar panels, and double glazing. Eligibility typically depends on income, property type, and the type of improvement being made.
Current schemes worth checking:
- Great British Insulation Scheme – support for cavity wall and loft insulation
- Boiler Upgrade Scheme – grants towards heat pumps
- ECO4 – energy efficiency improvements for lower-income households
- Disabled Facilities Grant – means-tested funding for adaptations for disabled residents
Visit the GOV.UK website for current eligibility criteria, as schemes open and close throughout the year.
Local authority grants
Some local councils in England, Wales, Scotland, and Northern Ireland offer separate grants or low-interest loans for home improvements. Citizens Advice is a good first port of call for local scheme availability.
Which Option is Right for You?
The right way to fund home improvements depends on three things: your project budget, how urgently the work needs to happen, and whether you want to use your home equity or keep the borrowing unsecured.
Your situation | Recommended route |
Large project (£25,000+), homeowner with equity, not in a hurry | Remortgage or second-charge mortgage |
Large project but existing mortgage has high early repayment charges | Second-charge mortgage |
Project under £25,000, good credit, need funds quickly | Unsecured personal loan |
Small project under £10,000, can repay within a year | 0% purchase credit card |
Energy efficiency upgrade, meet income/property criteria | Government grant |
Have savings, no urgency | Cash savings (avoids all interest) |
Key Things to Consider Before Borrowing
- Get quotes first. Obtain at least two or three contractor quotes before applying for finance, so you know the exact amount you need to borrow.
- Secured vs unsecured. Secured borrowing (remortgages, second-charge mortgages, secured loans) typically offers lower interest rates and higher limits, but your home is at risk if you miss payments. Unsecured borrowing carries no property risk but costs more in interest.
- Repayment term. Most loan products offer fixed monthly repayments. Longer terms reduce the monthly payment but increase the total interest paid.
- Your credit history. Good credit opens up the lowest rates on unsecured products. A lower credit score may mean a secured route is more cost-effective.
- Early repayment charges. If you are considering remortgaging, check whether your current mortgage has early repayment charges as these can make a second-charge mortgage a better alternative. Our guide to how remortgaging works explains this in more detail.
If you are a homeowner weighing up the remortgage route, our intuitive online platform lets you compare remortgage deals from across the UK in real time. Our team of specialists is here to help you find a solution that fits your financial circumstances and long-term goals. Start comparing today or get in touch if you would prefer to speak with someone first.
FAQs
The most common ways to fund home improvements in the UK are remortgaging to release equity, taking out a secured or unsecured home improvement loan, using a 0% purchase credit card, or applying for a government grant. The right choice depends on the size of the project, how quickly you need the money, and whether you want to borrow against your property.
Eligibility for home improvement grants in the UK varies by scheme. Government energy grants such as ECO4 and the Great British Insulation Scheme are generally targeted at lower-income households or those receiving certain benefits. The Disabled Facilities Grant is means-tested and available to homeowners and tenants who need adaptations for a disability. Local authority grants vary by council. Visit GOV.UK or speak to Citizens Advice to check current schemes in your area.
There is no single best way, it depends on your circumstances. For large projects, remortgaging or a secured loan typically offers the lowest interest rates, though your property is at risk if you cannot keep up repayments. For smaller projects where speed matters, an unsecured personal loan or 0% credit card is faster and simpler to arrange. If you qualify for a government grant, that is almost always the cheapest option as it does not need to be repaid.
Yes. Remortgaging is one of the most effective ways to fund significant home improvements if you have equity in your property. You replace your existing mortgage with a new one at a higher amount and receive the difference as a lump sum.
With an unsecured personal loan, most UK lenders will advance up to £50,000. Secured borrowing, including remortgages and second-charge mortgages, can go well beyond £250,000, subject to the equity available in your property and the lender’s criteria. The amount you can borrow is also influenced by your income, credit history, and the lender’s affordability assessment.
About the Author:
Matt is a top contributor at Speedy Remortgage and has worked in the financial services industry for over a decade now. Through his expertise on mortgage and remortgage has helped hundreds of customers to achieve their property goals.