A change for the better
A remortgage (also known as refinancing) is the process of paying off one mortgage with the proceeds from a new mortgage using the same property as security. Often the purpose of switching is to secure a more favorable interest rate from a different lender.
The process of remortgaging does not usually involve moving home or taking out a second mortgage on the property; it is in effect the transfer of a mortgage from one lender to another.[2]
Homeowners may choose to remortgage for various reasons, usually to reduce the overall monthly mortgage payment amounts. However other reasons may include to pay off a mortgage earlier, to raise capital, or to consolidate other more expensive short term debts.
Homeowners often mis-use the expression remortgage when they are simply switching from one product to another with the same lender; this is not a remortgage which involves the removal of one legal charge over a property and its substitution with another in favour of a new lender.