The Main Difference Between A Remortgage And A Mortgage.
Remortgage and mortgage are words that we hear often but many are unsure as to the exact meaning of the terms.
The home loan that every person needs to buy a home is called a mortgage, and when buying a house every person needs a mortgage unless they have cash in hand to buy the property out right.
Well over half of the population of the UK own their own home and so in the course of their life time the majority of the population will have held at least one mortgage and as most move house every few years most will have had five or more mortgages in the course of their life.
If someone needs a mortgage there are two main ways of making an application and that is by seeking the help of a whole of the market mortgage broker or by applying straight to a mortgage provider.
When needing a mortgage, a mortgage broker is the better choice as the mortgage broker has access to all lenders to give you the greatest choice compared to a bank or building society who only sell their own mortgage products severely limiting options, and at the end of the day costing you money.
Fixed rate mortgages and trackers are the two popular forms of mortgages and again a mortgage broker is best placed to discuss these two options.
Basically a tracker tracks the Bank of England Base lending Rate and the repayment will change when the base rate changes.
Fixed rates remain the same for the period of the fixed rate however long this is originally set at.
A remortgage is when a homeowner changes his current mortgage from one mortgage provider to another and this is done to obtain lower repayments with a better interest rate.
In every other way remortgages are exactly like mortgages and come in both tracker and fixed rates as well as having the exact same rates of interest.
Want to find out more about remortgages, then visit Champion Finance’s site on how to choose the best remortgage for your needs.