Remortgaging is a process whereby an individual or business pays an existing mortgage on a particular property using the proceeds from a new mortgage, which is taken out against the same property. Remortgaging is often considered to be a complicated and time-consuming process, but in actual fact it is straightforward.

Remortgaging a property does not affect the residential or commercial status of that property; it can continue to be used in the exact same manner as before. A remortgage simply means that, in effect, the mortgage is transferred between lenders, involving a change in the legal directives associated with the property, which is often in a more favourable direction than was offered by the original mortgage lender.

Occasionally, remortgaging can involve a renegotiation of the original deal between the lender and the borrower, culminating in a new mortgage with better financial and legal imperatives.

There are several reasons why individuals and businesses should consider remortgaging their properties. Primarily, the process of remortgaging can save the borrower money, by, for example, changing the manner in which interest is charged, a better interest rate can save thousands of pounds for borrowers in the long term.

Remortgaging also offers the possibility of refinancing, with the sharp rise in property prices of recent years, many proprietors of commercial and private properties are sitting on an absolute fortune; by remortgaging it is possible to release some of the collateral pertaining to the property.

Additionally, a business or individual is able to reduce the costs of their repayments by increasing the life-term of the mortgage. Bear in mind the difference between a residential and commercial mortgage; where the latter can only normally be taken out for a maximum of between 15 and 20 years, residential mortgages can be taken out for a maximum of 25 years.

Remortgaging via a residential remortgage can increase the value of the property in the future; by freeing capital from the property, an individual is able to invest in renovations and improvements to the home, thus increasing its market potential- whilst at the same time improving their home comforts, and the satisfaction of having a home to be proud of.

For commercial properties, remortgaging can be a significant factor in improving the running of the business. If the business has achieved substantial growth since the beginning of the original mortgage, remortgaging will allow you to get a more competitive deal than you were first offered by lenders.

With commercial remortgaging, releasing equity tied up in the business can give you the financial means needed for further expansion. It means being in receipt of capital, without the added expense of a business loan; potentially allowing the business to expand, acquire new equipment, improve cash flow and invest in further business opportunities.

Via consultation with remortgage lenders, a suitable deal can be realised which will take into account the reasons for the remortgage, and borrowers will thus be able to find deals specifically tailored to their requirements.