How much can I borrow for a home improvement loan?

The simple answer is that there is no set figure. The amount you can borrow on a home improvement loan depends on a number of factors.

Firstly, your borrowing potential will depend on the amount of equity that you have in your home. The higher the amount of equity you have (the difference between the value of your home and your outstanding borrowing), the higher your home improvement loan borrowing potential will be.

For example, if you have a property worth £100,000 and a mortgage of £50,000, your equity is £50,000. Lenders will typically advance you a loan of up to 80-90% of this equity.

Sometimes, the home improvements you are undertaking will increase the value of your home. For example, adding an extension may increase your home’s value by £20,000. In these cases, a lender will sometimes lend you money based on the ‘when finished’ valuation of your property. A surveyor will provide a current and ‘when finished’ valuation based on your plans and return to check the work has been carried out satisfactorily before all or part of the loan is released.

Your home improvement loan amount will also be determined by your income and outgoings. A lender will generally want to be sure that you have sufficient income to cover both your main mortgage and a home improvement loan. Lenders often underwrite home improvement loan applications in much the same way as they underwrite home mortgages; by looking at your total income and outgoings and deciding whether the loan is affordable to you.

The amount you can borrow on a home improvement loan will also depend on the work you are planning to complete. A loan for a new bathroom or kitchen is likely to be significantly lower than the loan needed for new windows, a conservatory or an extension to your home. Whilst the loan will primarily be based on your income, outgoings and the equity in your home, clearly it will also be determined by the cost of the work you wish to undertake.

To get your home improvement loan, fill our form on the right.