Agricultural Re-Mortgage

Let Us Help You

Complete this online form with details of your enquiry and one of our advisors will call you back.

    Call Us Now

    To Discuss Your Best Options Call Us Now

    Contact us now!

     

    Agricultural Re-Mortgage for UK Farms & Agricultural Businesses

    Gable Asset Finance — specialist agricultural re-mortgage advice

    Gable Asset Finance provides specialist re-mortgage and refinancing advice to UK farms and agricultural businesses. An agricultural re-mortgage lets you refinance an existing mortgage on farmland, farmhouses or agricultural buildings in order to release equity, consolidate debt, fund new equipment, refinance short-term borrowing, or invest in diversification and growth. This page explains how agricultural re-mortgages work, the benefits and risks, the types of re-mortgage available, typical lender criteria, the step-by-step process, and practical tips to improve your chance of a successful application.

    What is an agricultural re-mortgage?

    An agricultural re-mortgage is the process of replacing or moving an existing mortgage on farm land, farm property or buildings to a new mortgage — typically with a different lender, or by renegotiating the rate and terms with your existing lender. The primary aims are often to:

    • Release equity (cash) from the value of farm property.
    • Obtain a lower interest rate or improved loan terms.
    • Change the mortgage length or repayment profile.
    • Consolidate multiple borrowings into a single, simpler facility.
    • Fund capital investment such as equipment, buildings, slurry stores or renewable projects.

    For many farm businesses the property (farmhouse, farmyard, outbuildings, land) represents their largest asset and one of the most practical sources of capital for growth. A re-mortgage can be structured to match agricultural cashflow — including seasonal repayments or interest-only periods — and can unlock funds without selling productive land or assets.

    How an agricultural re-mortgage works — the basics

    At its core, re-mortgaging is about swapping one loan for another. The typical steps and mechanics are:

    1. Valuation: A professional surveyor or valuer assesses the farm property to establish current market value.
    2. Loan calculation: The lender applies a loan-to-value (LTV) ratio to the valuation to determine how much they will lend. Agricultural LTVs vary by lender and asset type.
    3. Repayment of existing debt: The new mortgage repays the outstanding balance of the old mortgage (and often any short-term borrowing such as overdrafts, bridging loans or merchant finance).
    4. Release of equity: Any additional borrowing above the amount required to clear existing debt is released as cash to the borrower for investment, consolidation or other approved purposes.
    5. New terms and security: The new lender registers a charge (mortgage) on the property and sets new interest rates, term lengths and covenant conditions.

    Re-mortgages can be either fixed-rate, variable (tracker), or a mixture of the two. Lenders also offer interest-only periods, capital repayment terms, and staggered drawdowns for phased projects.

    Why farmers choose to re-mortgage

    There are several practical reasons agricultural businesses opt to re-mortgage:

    • Release capital for investment: Purchase new or used tractors, combines, livestock handling equipment, or automated systems without selling land or diluting ownership.
    • Refinance short-term borrowing: Replace expensive bridging loans, merchant cash advances or overdrafts with a longer-term mortgage at a better rate.
    • Consolidate debt: Combine multiple loans, credit cards or hire-purchase agreements into a single facility for easier management and potentially lower monthly payments.
    • Fund diversification: Invest in renewable energy (solar, biomass), agri-tech, buildings for on-farm processing, or convert land for new income streams such as glamping, holiday lets or equestrian facilities.
    • Improve cashflow predictability: Secure fixed payments or restructure repayments to align with seasonal income peaks and troughs.
    • Lower the cost of borrowing: Capitalise on improved interest rates or better lender terms to reduce overall interest costs.
    • Estate and succession planning: Release liquidity to fund family transfers, buyouts, or professional fees tied to succession and business restructuring.

    What you can use re-mortgage funds for

    Funds released from an agricultural re-mortgage are typically flexible but must be used for acceptable business or personal purposes agreed with the lender. Common uses include:

    • Buying farm machinery and equipment (tractors, harvesters, milking systems).
    • Farm building works (refurbishment, livestock housing, slurry storage).
    • Purchasing additional land or farmlets.
    • Debt consolidation (clearing overdrafts, bridging finance, merchant facilities).
    • Investing in renewable energy and energy efficiency (solar panels, anaerobic digestion).
    • Funding diversification projects: farm shops, processing facilities, holiday accommodation.
    • Working capital for seasonal needs (seed, fertiliser, feed, labour).
    • Succession and family buy-outs.

    Types of agricultural re-mortgage products

    Lenders offer a variety of product types specifically designed for agricultural borrowers. Common options include:

    Standard re-mortgage (purchase and remortgage)

    Replace an existing mortgage with another, often at a lower rate or on improved terms. The new mortgage repays the old lender and registers a new charge against the property.

    Agricultural mortgage with staged drawdown

    Useful for multi-phase projects (building works, slurry stores, renewable installations). Funds are released in stages against agreed milestones.

    Seasonal repayment mortgages

    Repayments are structured to match seasonal income — lower instalments during quiet months and higher after harvest or sales events. This profile helps farms manage peaks and troughs.

    Interest-only agricultural mortgage

    Interest is paid during the term with the capital repaid at the end. This can suit short-term strategic plans but requires a clear exit strategy for capital repayment (sale, refinance, income realisation).

    Variable / tracker mortgages

    Rates are linked to a base rate (e.g. Bank Rate), so payments move with markets. Trackers can be attractive when rates are low but carry interest rate risk.

    Fixed-rate agricultural mortgages

    Provide certainty of repayments by fixing the interest rate for a period (e.g. 2, 3, 5 years). This helps budgeting and reduces exposure to rate rises.

    Bridging to mortgage

    Bridging loans are short-term solutions when timing is critical (purchase or urgent works) before a longer-term mortgage is arranged. Bridging is typically more expensive and should be repaid or replaced by a mortgage promptly.

    Sale & leaseback on farm assets

    Where appropriate, valuable farm equipment or buildings can be sold to a funder and leased back. This releases capital but retains operational use of the asset.

    Lenders and loan-to-value (LTV) for farms

    Different lenders assess agricultural property differently. Loan-to-value ratios on farms depend on asset type, location, land quality, planning, tenancy status and covenant strength. Typical considerations include:

    • Arable land and productive farmland: Often favourable LTV if land is freehold and has clear title.
    • Livestock units and specialised buildings: Lenders assess functionality, condition and ability to generate income.
    • Farmhouses: Residential element may attract residential mortgage criteria for that portion of the value.
    • Tenanted land: Rental agreements, farm business tenancies and occupancy clauses affect lender appetite and LTV.

    In practice, LTVs for agricultural re-mortgages often range from 50% to 70% depending on the lender and asset, though specialist lenders may consider higher LTVs on strong covenants or blended security packages. Gable Asset Finance works with mainstream banks, regional agricultural lenders and specialist funds to secure competitive LTVs and terms tailored to farm businesses.

    What lenders look for — underwriting criteria

    To secure a re-mortgage lenders will assess the following areas:

    • Property valuation: Market value, land quality, buildings condition and any planning constraints.
    • Farm business performance: Historic accounts, profitability, margins and cashflow forecasts (typically 2–3 years of accounts where available).
    • Income diversification: Income sources — farming, diversification activities, subsidies (e.g. basic payments), contract work.
    • Borrower covenant & experience: Experience of the owners/directors, management skills and personal credit.
    • Existing debts & encumbrances: Other charges, outstanding bridging loans, hire purchase obligations.
    • Environmental & compliance risk: Permits, slurry and nutrient planning, environmental designations and potential liabilities.
    • Exit strategy: How will capital be repaid or restructured at term end (sale, refinancing, cash generation)?

    Documents you will typically need

    Preparing the right documentation speeds the re-mortgage process. Typical documents include:

    • Title deeds and property particulars
    • Valuation/estate agent figures (if available)
    • Historic accounts (last 2–3 years) and management accounts
    • Cashflow forecasts and budgets
    • Details of existing loans, hire purchase, overdrafts and security
    • Evidence of subsidies, contracts, or diversification income
    • IDs for owning directors/partners and confirmation of entity structure
    • Business plan for intended use of funds (investment, consolidation, expansion)

    Step-by-step re-mortgage process with Gable Asset Finance

    1. Initial consultation: Talk to our agricultural team to discuss your objectives — release equity, consolidate debt, buy equipment, or fund diversification.
    2. Preliminary assessment: We review basic documents and provide indicative options and the likely LTV you can achieve.
    3. Valuation instruction: We arrange a professional valuation to determine current market value of the farm property and buildings.
    4. Formal application: Submit full application with accounts, forecasts and supporting documentation.
    5. Lender underwriting: The chosen lender conducts due diligence — credit checks, site visits and covenant assessments.
    6. Offer & terms: On approval the lender issues an offer letter outlining interest rate, term, covenants and any conditions precedent.
    7. Legal work & security: Conveyancing and legal documentation prepare for registration of the new mortgage charge.
    8. Completion & repayment: The new lender repays the old lender and any bridging debt. Released funds are paid to you or your supplier as agreed.
    9. Post-completion support: We help manage any staged drawdowns, facilitate release of funds for purchase of equipment and monitor covenant compliance.

    Costs to consider

    Re-mortgaging incurs costs which should be factored into the overall decision:

    • Valuation fees
    • Legal fees (conveyancing and charge registration)
    • Arrangement fees charged by the lender
    • Early repayment charges or exit fees from existing lenders (if applicable)
    • Broker fees (if applicable) — Gable Asset Finance will discuss any broker fees upfront
    • Survey costs for buildings, environmental or drainage reports where necessary

    Risks and considerations

    While re-mortgaging is a powerful tool, it is not without risk. Important considerations include:

    • Securing further debt against land: Using land as security increases risk to the asset in adverse trading conditions.
    • Interest rate risk: Variable rate mortgages expose you to rate increases — consider fixed-rate options if budgeting certainty is a priority.
    • Cashflow matching: Ensure repayment profiles align with seasonal income; otherwise liquidity strain may occur.
    • Environmental & planning liabilities: Undeclared liabilities or planning issues can impact valuation and lender appetite.
    • Exit strategy: Have a realistic plan for repaying the capital at the end of term (sale, refinancing, income generation).
    • Personal guarantees: Some lenders may require personal or director guarantees, especially for smaller businesses or higher risk profiles.

    Tax, accounting & succession implications

    Re-mortgaging interacts with tax and succession planning. Key points to consider:

    • Capital gains & tax reliefs: Selling land or buildings later may incur Capital Gains Tax — speak to your tax adviser about hold periods and reliefs such as agricultural property relief where applicable.
    • Capital allowances: Purchases funded by released equity (machinery, buildings) may qualify for capital allowances; consult your accountant for eligibility.
    • Inheritance & succession: Releasing equity can support farm succession by funding buyouts or providing cash for estate planning. Discuss implications with a specialist solicitor.
    • VAT and grant interactions: If grant funding or VAT recovery is relevant to a project, consider timing and structure to maximise net benefit.

    Alternatives to re-mortgaging

    Depending on your objectives, alternatives to a full re-mortgage may be preferable:

    • Sale & leaseback: Sell a building or asset to a funder and lease it back to release capital while retaining use.
    • Asset finance: Hire purchase or lease for equipment purchases without putting additional charges on land.
    • Invoice finance: Improve cashflow by advancing against unpaid invoices (useful for contractors and contractors with large receivables).
    • Bridging finance: Short-term finance for opportunities requiring immediate funding, replaced later by a mortgage.
    • Grants & subsidies: Investigate agricultural and rural development grants that may support infrastructure or diversification projects.

    Practical tips to improve your chance of approval

    • Get your accounts in order: Up-to-date management accounts and clear cashflow forecasts are essential.
    • Prepare a clear plan for use of funds: Lenders want to see how the funds will improve farm profitability or reduce cost.
    • Resolve outstanding liabilities: Clear small default items and tidy personal and business credit before applying.
    • Consider staged drawdowns: For large projects, staging funds reduces lender risk and matches spend to milestones.
    • Engage an agricultural broker: Specialist brokers (like Gable Asset Finance) know which lenders suit particular farm types and will present your case effectively.
    • Shop valuations: Multiple valuations or local estate agent insights can demonstrate realistic market value.
    • Be transparent: Disclose tenancy agreements, environmental designations, and any rights of way at the outset to avoid surprises.

    Case studies — illustrative examples

    Case study 1 — Dairy farm replacing machinery

    Situation: A family dairy farm needed new milking equipment and a replacement tractor but wanted to avoid selling productive land.

    Solution: Gable Asset Finance arranged an agricultural re-mortgage that released equity from surplus land. A portion of the funds cleared an expensive short-term loan and the balance purchased the equipment with seasonal repayments tailored to milk sales.

    Result: Improved milking efficiency, lower maintenance costs and a stable repayment profile aligned to milk price receipts.

    Case study 2 — Arable farm consolidates debt and funds diversification

    Situation: An arable farm carried multiple high-interest facilities and wanted to start a grain drying business on site.

    Solution: A re-mortgage consolidated existing debt into one cheaper mortgage and released funds to build a drying facility with staged drawdowns for construction.

    Result: Reduced interest costs, simplified finances and a new revenue stream that improved long-term resilience.

    Case study 3 — Smallholding funds succession buy-out

    Situation: Siblings wanted to buy out another family member to secure majority ownership of a smallholding.

    Solution: A re-mortgage provided the cash for the buy-out and restructured mortgage repayments to match expected rental and diversification income.

    Result: Smooth succession, avoidance of forced asset sale and a clear repayment plan to meet new family cashflow patterns.

    Frequently asked questions (FAQs)

    How long does a re-mortgage take?

    Timescales vary. A straightforward refinance can complete in 6–12 weeks, but more complex cases, staged projects or those requiring planning permissions can take longer. Early valuation and a complete application speed the process.

    Will I pay a penalty for repaying my existing mortgage early?

    Possibly. Check your current mortgage terms for early repayment charges (ERCs). In many cases the savings from a better rate offset the ERC, but this must be modelled carefully.

    Can I re-mortgage if I have tenants or farm business tenancies?

    Yes — but tenants, tenancy agreements and occupancy clauses affect lender appetite. Lenders will review tenancy terms and may apply different LTVs or require additional information.

    Is re-mortgaging suitable for small farms?

    Yes. Small farms frequently use re-mortgages to fund equipment, consolidate personal debt incurred during start-up, or to invest in diversification. Lender appetite varies, so specialist advice is valuable.

    Do I need to use the funds for farming activities?

    Not always. Lenders commonly allow funds for business-related purposes such as equipment, diversification or consolidation. If funds are for personal use, different terms may apply. Always disclose intended use to the lender.

    Why use Gable Asset Finance for agricultural re-mortgages?

    We specialise in agricultural finance and understand farm business models, seasonal income and the practical needs of farming families. Our service includes:

    • Access to mainstream and specialist agricultural lenders;
    • Guidance on structuring repayments and matching seasonality;
    • Support with valuation procurement and legal paperwork;
    • Advice on tax, succession and exit strategies in partnership with accountants and solicitors;
    • Negotiating terms that reflect farming realities, including staged drawdowns and mitigation of environmental liabilities.

    Next steps — how to start your agricultural re-mortgage

    1. Contact Gable Asset Finance: Arrange an initial conversation to discuss objectives and feasibility.
    2. Prepare documents: Gather title information, recent accounts, budget forecasts and details of existing borrowing.
    3. Valuation & proposal: We help arrange a valuation and build a tailored financing proposal with recommended lenders.
    4. Application & underwriting: Submit formal application and work with the lender through underwriting.
    5. Completion & deployment: On completion, your existing debts are repaid and funds released for the agreed purpose. We remain available for aftercare and future refinancing advice.

    Contact Gable Asset Finance — agricultural re-mortgage specialists

    If you are considering refinancing farm property to release equity, consolidate debt or invest in growth, Gable Asset Finance can help. Our agricultural finance team will explain options available to your farm, prepare a clear proposal and guide you through the valuation, lender selection and completion process.

    Contact us today for a no-obligation consultation. Please have details of your current mortgage, recent accounts and an outline of how you would like to use the funds to hand for faster pre-assessment.

    Gable Asset Finance — specialist agricultural re-mortgage advice for UK farms and rural businesses: release equity, refinance smarter and invest in the future of your farm.