How to Fund a Renovation in the UK (2025 Guide for Homeowners & Landlords)

Planning a Renovation in 2025 or 2026? Here’s How to Fund It

You’re not alone. According to Rated People, over 54% of UK homeowners started or planned renovation projects last year, and the trend shows no signs of slowing.

But with the average home renovation now costing over £15,500, many homeowners and landlords face the same challenge:

How to fund a renovation in the UK without draining savings, overpaying on credit cards, or getting stuck in unsuitable finance.

The good news? Whether you’re upgrading your home or improving a buy-to-let, there are 5 practical, flexible ways to fund your renovation project. Let’s break them down clearly.

1. Remortgage to Fund Home Renovations

What is a remortgage or further advance?

A remortgage means switching to a new lender and borrowing more than your current mortgage balance, releasing equity to fund your project.

A further advance is when your existing lender offers extra borrowing without switching deals.

Both options use your existing home equity to fund renovations and often come with lower interest rates than unsecured borrowing.

When is it suitable?

• You’ve owned the property for a few years and built up equity.

• You’re not locked into a low-rate mortgage.

• You have clear plans for how to use the funds.

  
  

Example:

• Property value: £400,000

• Mortgage balance: £250,000

• Equity: £150,000

• Potential release: Up to £75,000 (subject to income and affordability)

  
  

Pros and cons

• Low interest rates

• Spreads repayments over the long term

• Can trigger early repayment charges

• Requires new affordability checks

  
  

💡 Tip: If you’re self-employed, prepare your last 2 years of tax returns and SA302s to support the application.

2. Bridging Loans for Renovation Projects

What is a bridging loan?

A bridging loan is a short-term, interest-only loan used to finance a property purchase or renovation project, especially when a standard mortgage isn’t suitable.

Common with investors, bridging loans are often used in BRR (Buy, Refurb, Refinance) strategies or for auction purchases.

When is it suitable?

• The property is unmortgageable (e.g. no kitchen or bathroom).

• You plan to sell or refinance quickly.

• You’re working to tight deadlines (completing within 7–21 days).

  
  

Example:

• Purchase price: £180,000

• Refurb budget: £30,000

• Projected value post-works: £265,000

• Loan: 75% of purchase + 100% of refurb (rolled into one facility)

• Exit: Refinance to a BTL or sell on the open market

  
  

Pros and cons

• Fast access to funds

• Ideal for property flips or refurb-to-let

• Rates start from 0.65% to 1.25% per month

• Requires a clear exit plan (sale or remortgage)

  
  

The UK bridging market reached over £8.3 billion in 2024, showing its growing role in renovation finance.

3. Using Second Charge Mortgages to Renovate

What is a second charge mortgage?

A second charge mortgage is a secured loan taken out in addition to your main mortgage, using the same property as security. It’s useful when you want to raise money without switching your existing mortgage, especially if you’re on a great fixed rate.

When is it suitable?

• You’re locked into a low-rate deal.

• You want to borrow £25k–£100k+.

• You have equity and provable income.

• You want to preserve your current mortgage.

  
  

Example:

• Main mortgage: £250,000 at 1.89% fixed until 2028

• Need: £40,000 for a loft extension

• Solution: Second charge loan at 6.5% (instead of remortgaging at 5.75% + paying ERCs)

  
  

Pros and cons

• Keep your existing mortgage intact

• Flexible repayment terms

• Slightly higher rates than standard mortgages

• Requires a separate affordability assessment

  
  

Around 70% of UK mortgage holders are currently on low fixed rates, making second charges more common.

4. Personal Loans & Credit Cards For Light Home Improvements

What are unsecured renovation loans?

Personal loans and credit cards offer unsecured borrowing, meaning you don’t use your home as security. These are quick to arrange and suitable for smaller renovations but often come with higher interest rates.

When is it suitable?

• Your project costs less than £20,000.

• You want fast access to funds.

• You have strong credit and regular income.

• You’re not comfortable using property as collateral.

  
  

Example scenario

• Kitchen refit: £12,000

• Borrowed via unsecured loan at 7.5% over 5 years

• Monthly repayments: approx. £240

  
  

Pros and cons

• Quick access

• No legal work or valuations

• High APRs (often 6%–30%+)

• Can affect credit score and borrowing capacity

  
  

Always check the total repayable, not just the monthly figure. Some “cheap” monthly deals cost more over time.

5. Green Mortgages & EPC Upgrade Loans

What are green mortgages?

Green mortgages reward homeowners or landlords for improving energy efficiency. You could receive cashback, better rates, or enhanced borrowing for renovations that upgrade your EPC rating, typically to Grade C or higher.

When is it suitable?

• You’re improving insulation, heating, or energy systems.

• Your property is currently EPC D–G.

• You want to qualify for better long-term mortgage options.

• You’re a landlord preparing for 2028 EPC compliance.

  
  

Example improvements

• Loft or cavity wall insulation

• Combi boiler upgrade

• Double glazing

• Solar panels or air source heat pumps

  
  

Pros and cons

• May increase property value

• Lower future energy bills

• Potential for cashback/rate incentives

• Limited to eligible works

• EPC upgrades can take time to register

  
  

Tip: Ask your broker if your renovation qualifies for lender incentives or cashback, especially if energy efficiency is a key goal.

Summary Table – What’s Right for You?

Situation	Best Option
You have strong equity and income	Remortgage / Further Advance
You need speed or flexibility	Bridging Finance
You want to keep a low-rate deal	Second Charge Mortgage
Small, cosmetic projects	Personal Loan / Credit Card
You’re improving EPC rating	Green Mortgage / EPC Loan

Before You Start Renovating…

Before calling the builder, take a moment to check:

• What’s your current equity?

• Do you know your EPC rating?

• Are you self-employed or PAYE?

• Do you plan to sell, refinance, or stay long term?

  
  

Ready to Renovate Smart?

Let’s find the right finance solution before you overspend or overextend.

✅ Take the 2-Minute Mortgage Scorecard

✅ Book a Free 15-Minute Consultation

✅ Or download your DealSense Refurb Report

Each of these affects what lenders will offer you and how much you can safely borrow.

Disclaimer: Finance with Stuart is a personal brand of Kingston Finance Ltd (Company No. 14227379), which is an Appointed Representative of Connect IFA Ltd (FRN 441505) authorised and regulated by the Financial Conduct Authority. General information only, not financial or legal advice.