Do you need a deposit to remortgage? In most cases, no. Unlike buying a home, you do not need to save up a lump sum, because the equity you have already built in your property acts as your deposit. The more equity you hold, the better positioned you tend to be for competitive rates.
This guide explains how equity works in a remortgage, why loan-to-value matters and what happens if you have very little equity, or none at all. For the full picture, see our pillar guide, remortgaging explained.
Your equity is your deposit
When you first buy a home, you need a cash deposit because you own none of the property yet. When you remortgage, you already own a share of it. That share, the difference between your home's value and your outstanding mortgage, is your equity, and it plays the same role a deposit does.
For example, if your home is worth £300,000 and you owe £210,000, you have £90,000 of equity, or 30% of the property's value. You would not need to find any additional cash to remortgage the remaining balance.
Loan-to-value explained
Lenders describe this in terms of loan-to-value (LTV) — the size of your mortgage as a percentage of your home's value. In the example above, a £210,000 loan on a £300,000 home is 70% LTV.
LTV bands typically look like this:
- 60% LTV or lower — usually the sharpest rates.
- 75% LTV — still very competitive.
- 85% LTV — good options, slightly higher rates.
- 90–95% LTV — available, but with the higher rates in the range.
The key point: more equity means a lower LTV, which typically means better rates. As you pay down your mortgage over the years, and if your home rises in value, your LTV usually falls, putting you in a stronger position each time you come to remortgage.
When more equity really helps
Because rates step down as your LTV falls, crossing into a lower band can make a real difference to your payments. If you are close to a threshold, for example just above 60% or 75%, it can be worth checking whether paying down a small amount, or a higher valuation, tips you into the better band. An adviser can tell you whether that is worth doing in your case.
Do you ever need to put money in?
There are a couple of situations where you might add cash:
- To reach a better LTV band. Overpaying a lump sum before remortgaging could move you into a lower band and a better rate, though check for any overpayment limits on your current deal.
- If your borrowing needs have changed. If affordability has tightened, reducing the loan slightly with savings could help an application.
Neither is a required deposit in the usual sense; they are optional moves to improve your position.
What about negative equity?
Negative equity is where your mortgage is larger than your home's current value, for example owing £310,000 on a home worth £290,000. This can happen if property prices fall.
If you are in negative equity, remortgaging to a new lender is usually not possible, because there is no equity to lend against. However, you may still have options:
- A product transfer with your existing lender, taking a new rate without moving the loan, which does not usually require a fresh valuation in the same way.
- Overpaying where you can afford to, to rebuild equity over time.
- Simply waiting for the balance to reduce and values to recover.
If you think you may be in or near negative equity, speak to an adviser before your current deal ends so you are not caught out on the standard variable rate.
How advice helps
Working out your LTV, spotting whether you are near a better band, and knowing which lenders suit your situation is exactly what a whole-of-market adviser does. Wisely reviews your equity and matches you to the most competitive deal available to you, with a named adviser guiding you through.
LTV bands and figures are correct at the time of writing and can change. Your home may be repossessed if you do not keep up repayments on your mortgage.
Talk to a Wisely adviser
If you are unsure how much equity you have or which LTV band you fall into, book a free, no-obligation call on 023 8268 1111. We will explain your options clearly.
This guide is general information, not personal financial advice.
Frequently asked questions
Do I need a deposit to remortgage?
Usually not. The equity you have built in your home, the difference between its value and your outstanding mortgage, acts as your deposit. You only need extra cash if you choose to reduce your loan to reach a better loan-to-value band.
How does equity affect my remortgage rate?
More equity means a lower loan-to-value, which typically unlocks better rates. Rates tend to step down at bands such as 85%, 75% and 60% LTV, so holding more equity can meaningfully reduce your payments.
Can I remortgage with negative equity?
Remortgaging to a new lender is usually not possible in negative equity, because there is no equity to lend against. You may still be able to take a product transfer with your current lender, overpay to rebuild equity, or wait for the position to improve.
Should I overpay before remortgaging?
It can help if a lump sum moves you into a lower LTV band and a better rate. Check your current deal for overpayment limits first, as exceeding them could trigger a charge. An adviser can tell you whether it is worthwhile.