Mortgage refinancing

Mortgage refinancing involves terminating an existing loan secured by real property and replacing it with a new debt facility, generally from a different financial institution. This strategy is employed when market conditions have improved or the current mortgage terms have become unfavourable compared to newly available rates.

In commercial real estate, an owner or investor settles the existing debt and re-securitises the property under revised contractual conditions. The process includes discharge of the original mortgage, legal fees, and registration of the new charge against the property. Refinancing is economically sound when interest rate savings outweigh setup costs and early repayment penalties.