The process of paying off one mortgage with the proceeds form a new mortgage by using the same property (as security) is called Remortgage. Although the term is mainly used commercially in the United Kingdom, the process that it describes is not uniquely British. In many cases, the purpose of switching is to secure a more favorable interest rate from a different lender.
The process of remortgaging does not necessarily mean moving home or taking out a second mortgage on the property; simply said, it is in effect the transfer of a mortgage from one lender to another one. There are many reasons the homeowners may choose to Remortgage, reducing the size of repayments, raising capital, paying off a mortgage earlier, or to consolidate other debts including.
The remortgage term is often misused by homeowners in the situations when they are simply switching from one product to another, but with the same lender. This is not a remortgage, because the process involves the removal o one legal charge over a property and then its substitution with another in favour of a new lender.
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