When you remortgage, you are switching your mortgage to another deal, and frequently another lender. Remortgages can be used for various reasons, most people switch mortgage simply because it will work out cheaper for them. One of the main reasons for this is that the introductory discounted interest rate may have finished with your current lender, therefore, it is possible that you would be able to get a lower rate of interest or a bigger discount with another lender. Another reason that people remortgage their house is an attempt to consolidate their debts, by way of taking out a mortgage for a larger amount on the existing mortgage.
Why should you remortgage?
Whether you have a fixed-rate mortgage, a tracker mortgage or another type of discount rate, your mortgage will likely be set at a special rate for a limited period of time. Typical examples include a two-year fixed-rate mortgage or a three-year tracker mortgage. When this special period comes to an end, mortgage holders have to choose a new deal or their mortgage will revert to the lender’s standard variable rate, usually considerably higher than special deals.