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Mortgage interest rates are continually changing. If someone obtained a mortgage say 5 years ago and it was a fixed mortgage, then the interest rate they would be paying at the end of the 5 years would be the same as that at the beginning of the term. The advantage of this is that there payments would stay the same each month so they could budget better but if the interest rate decreased during this term, then they would unfortunately be paying a higher interest rate. A lot of mortgage lenders also offer a longer term fixed rate mortgage which could mean the borrower would lose even more money on interest.
This would be a very good time to seriously consider re-mortgaging the property. A problem that the borrower could very well be placed with would be an early redemption penalty, which basically is a fee charged by the existing lender if the mortgage is changed to another lender within this fixed period. It would be worth looking at the different options available to see whether or not it would be beneficial to re-mortgage your property during this period or to simply just wait until the fixed term has expired.
When a mortgage owner wants to re-mortgage their property, they are simply renewing their mortgage deal. This is usually done with a new lender at cheaper interest rates and more flexible mortgage terms. A re-mortgage in the UK can considerably reduce your monthly payments and save you thousands of pounds at the end of the mortgage term.
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