Definitions
- Referring to the process of taking out a new mortgage on a property that already has an existing mortgage. - Talking about switching from one mortgage lender to another in order to get a better deal or more favorable terms. - Describing the act of borrowing additional funds against a property that already has a mortgage.
- Referring to the process of paying off an existing mortgage with a new mortgage that has different terms or conditions. - Talking about obtaining a new loan to replace an existing loan, often with better interest rates or repayment terms. - Describing the act of restructuring debt by obtaining a new loan to pay off existing debts.
List of Similarities
- 1Both involve obtaining a new loan to replace an existing loan.
- 2Both can result in lower interest rates or more favorable repayment terms.
- 3Both can be used to access additional funds.
- 4Both require going through a mortgage or loan application process.
- 5Both can be used to consolidate debt.
What is the difference?
- 1Purpose: Remortgaging is typically done to switch lenders or borrow additional funds, while refinancing is done to obtain better terms or conditions on an existing loan.
- 2Timing: Remortgaging can be done at any time, while refinancing is usually done after a certain period of time has passed since the original loan was taken out.
- 3Collateral: Remortgaging involves taking out a new mortgage on an existing property, while refinancing can involve using different types of collateral, such as a car or personal property.
- 4Costs: Remortgaging can involve additional fees and charges, such as early repayment fees or valuation fees, while refinancing may involve closing costs or other fees.
- 5Availability: Remortgaging is more common in the UK, while refinancing is more commonly used in the US.
Remember this!
Remortgaging and refinancing both involve obtaining a new loan to replace an existing loan, but they differ in their purpose, timing, collateral, costs, and availability. Remortgaging is typically done to switch lenders, borrow additional funds, or obtain a better deal, while refinancing is done to obtain better terms or conditions on an existing loan. Remortgaging involves taking out a new mortgage on an existing property, while refinancing can involve using different types of collateral. Remortgaging can involve additional fees and charges, while refinancing may involve closing costs or other fees. Finally, remortgaging is more common in the UK, while refinancing is more commonly used in the US.
