You might have mortgaged your property for a secured loan and you have borrowed to buy your home. And you might have heard about remortgaging and are interested in learning more; we’re here to help you understand what it means. A remortgage is a process where you switch from one mortgage product to another; the new agreement can be with same or a different lender. It will mean new terms and conditions for the loan and repaying your original mortgage in full.
Remortgaging is often confused with releasing equity but sometimes people decide to remortgage simply to achieve a better interest rate. When remortgaging you normally keep the loan for the duration of the agreed term of the product before you can switch from one lender agreement to another. The ‘product term’ means you are bound to the agreement for the specific period of time and should you wish to repay the mortgage before the product term is up you will be required to pay an Early Repayment Charge (ERC).