The most common reason for people looking to refinance their mortgage is to find a cheaper interest rate than the one they are paying with their current mortgage provider.
The mortgage market is competitive and there are deals to be found if you look at what's on offer – a mortgage advisor would tell you not to settle for whatever rate your current lender is offering when your mortgage deal comes to an end, but to scour the market for the cheapest rates. You can also hire a mortgage advisor by browsing to https://centrehypothecaire.com/
The economy also urges people to start looking for a new mortgage deal. If interest rates are low or look set to drop in the coming years, then homeowners might opt to switch their current deal to a tracker mortgage – one that tracks the base rate, so if it goes down, so do your monthly mortgage repayments.
Many people choose to refinance their mortgage in order to release capital from the property to use for something else. The reasons for this vary from making home improvements to sending the kids to university, but more often than not it is used to consolidate other debts, such as unsecured loans and credit cards.
When times are hard, some people choose to switch their home loan to an interest-only mortgage, so they only have to pay off the interest it accrues, not the loan itself, which means lower monthly repayments but a longer time spent paying off the mortgage.
Refinancing a mortgage is different for everybody – some do it when they want some spare cash, while others do it because they have no cash and need a lower interest rate. Whatever the reason, experts will always say the same thing – compare mortgage deals first and get the one that works best for you.