Remortgaging is switching your mortgage from one provider to another. Usually you would do this to cut your monthly repayments, pay off debts or reduce the term of your mortgage.
The main reasons you would move your mortgage to another provider are:
- To get a new cheaper mortgage at a lower rate. This will reduce your monthly repayments and you will have some extra cash – this could be used to make improvements to your home, or to pay off other debts
- To release some of your home’s value “Raise Money”: There are various reasons why you may want to conduct this:
- Home improvements- Build an extension, upgrade Kitchen or install a second Bathroom
- Consolidate your Debts- You release some of the equity in your home and remortgage for a higher amount, then you use the additional surplus money to pay off your other debts, consolidating them all into one and having one manageable payment.
- Funding- pay for a wedding or your child’s university cost, buy a new car or invest in further property “deposit for a buy to let”.
- To extend the term of your mortgage. If you pay it off over a longer period, the monthly repayments will be lower. (Though the amount of interest you pay will increase.)
- To reduce the term of your mortgage. If you find yourself with more money (after a pay rise for instance), you could increase your monthly payments – meaning that you will pay less interest overall and be mortgage-free faster.