Home owners rarely keep the same mortgage for the entire term of the loan. Whilst mortgages are usually issued with terms ranging from twenty to forty years the average time in which home owners keep their existing mortgage product is approximately seven years. Remortgages occur for many reasons including:

• Switching to a lower interest rate
• Locking in a fixed interest rate
• Releasing equity
• Consolidate debts
• Switching to a flexible mortgage
• Moving home

One of the main reasons people choose to remortgage their home is to switch to a product with a lower interest rate. This is particularly the case for mortgages that have been active for a long time. Borrowers who obtained a mortgage many years ago could be paying a excessive rate of interest on their home loan because rates were generally high at the time. If interest rates have dropped substantially since then, these borrowers could save money by remortgaging to a new product.

A similar story can occur for borrowers who obtained a mortgage many years ago with a variable rate of interest. If rates have dropped since then they may be better off remortgaging to a new product with a fixed rate of interest. A fixed interest rate can help borrowers with their household budgets by reducing the risk of interest rates rising and increasing the amount of mortgage payments due each month.

Borrowers who have built up equity in their homes may also remortgage to release some of that equity. Many lenders allow borrowers to do this and have few restrictions regarding the use of the released funds. Home owners regularly release funds for a wide variety of reasons such as paying for home renovations, buying a new car, or paying for their children’s education. Similarly, home owners who have built up equity in their homes and have borrowings other than their mortgages can remortgage to release equity to pay off their other debts. This process is called debt consolidation.

Whatever your reason for considering remortgaging your home please Contact Us today through the online form provided to receive impartial advice from an independent mortgage broker.