The debt/market value ratio of a mortgage can change due to repayment of the mortgage debt or due to a change in the value of the home. Depending on the bank’s policy, this can place customers in a different (usually lower) risk category, often linked to a different mortgage interest rate.
Various banks automatically adjust the interest rate if customers end up in a different risk category due to repayment. For adjustments because a home has increased in value, most banks ask their customers to apply for an adjustment themselves based on, for example, a valuation or the WOZ assessment. How banks arrange this depends on their own conditions, which they are transparent about. Banks also inform customers about this at various times, within their online environment, in the app and/or via newsletters.
