Remortgaging simply means finding another mortgage for your property.
When you buy a property, unless you are paying with cash (which few people do), you need to get finance for it. To do this you will most likely visit a mortgage broker and seek advice on the best deal around.

Your mortgage broker will take you through the various types of mortgage available. This means choosing the type of rate your mortgage will have – fixed, tracker, variable etc – and what type of product.

 

There are various types of mortgage product. Offset mortgages, for example, enable the borrower to use his or her savings to save money on their mortgage. The interest that would be accrued on the borrower’s savings is instead used to bring down the mortgage balance. Interest only mortgages are another option. These enable the borrower to just pay off the interest on the loan for a set period of time.

You will also pick what term you want (in other words, how long you want the loan for). Mortgage terms can be anything from two-years to twenty-five years.
If you choose to opt for a short-term mortgage i.e. a two-year mortgage then at the end of this term you will have to remortgage. The new mortgage you take out will ‘pay off’ the previous mortgage and you will then be repaying this new loan. The shorter your mortgage term each time you do this the more often you are going to have to remortgage.

If you want to remortgage before the end of your current mortgage you may have to bay an Early Repayment Charge.