A remortgage (also known as refinancing) is the process of paying off one mortgage with the proceeds from a new mortgage using the same property as security. The term is mainly used commercially in English-speaking countries such as the United Kingdom and the United States, though what it describes is not unique to any one country. Often the purpose of switching is to secure a more favorable interest rate from a different lender.
The process of remortgaging does not usually involve moving home or taking out a second mortgage on the property; it is in effect the transfer of a mortgage from one lender to another. Homeowners may choose to remortgage for various reasons, usually to reduce the overall monthly mortgage payment amounts. However other reasons may include to reduce the size of repayments, to pay off a mortgage earlier, to raise capital, or to consolidate other more expensive short term debts.
Homeowners often mis-use the expression remortgage when they are simply switching from one product to another with the same lender; this is not a remortgage which involves the removal of one legal charge over a property and its substitution with another in favour of a new lender.
The ability to remortgage is very much based on an individual's circumstances and as the costs involved can be very large it is always best to take advice from a suitably qualified individual.