According to the most recent data from Nationwide, house prices are up 1.5% in comparison to the same time last year. Continued high prices in the housing market and high interest rates have made it difficult for home buyers. Affordability is an issue for those hoping to climb on the property ladder, and despite there being hope for the Bank of England’s Monetary Policy Committee (MPC) to cut the standard base interest rate, it will not likely open an easier path to homeownership. The ability to afford a home in the UK has become more difficult, even though the economy has survived double digit inflation to finally reach target of 2.0%, interest rates are not expected to increase but begin decreasing, and wages have grown.

The latest data for remortgaging in the UK was released by LMS and revealed as expected that monthly repayments have increased for homeowners. There are millions of homeowners in need of a remortgage this year as their mortgage term is ending. Without a remortgage deal, they will be transitioned to their lender’s standard variable rate (SVR) which is normally a higher interest rate. Avoiding a SVR is the best strategy for saving money and stepping away from the risk of an interest rate rising in the years ahead as a SVR is not associated with a set term. Only a remortgage can offer a fixed interest rate locked in for the term the homeowner desires.

Hopeful home buyers had hoped the upcoming election would impact the housing market and their dreams of becoming a homeowner would be made an easier endeavor. The result, however, is less than expected and according to the online property listing website, Rightmove, house prices are not likely to decline to the levels that would make home buying more affordable. The average house price remains near the record high in June, and the Bank of England’s Monetary Policy Committee (MPC) voted this month to keep the standard base interest rate steady at 5.25%. Asking prices are high and so are interest rates, yet home buyers remain.

The last few years have been difficult for homeowners. In the blink of an eye, the Bank of England’s standard base interest rate grew from 0.10% to 5.25%. This put homeowners facing much higher interest rates when their mortgage terms ended, and they shopped for a remortgage. While choosing a new deal from lenders would offer vastly different choices than before, a remortgage is still the path to savings as avoiding a standard variable rate (SVR) is the best option. Allowing a lender to move their loan if bypassing a remortgage could have the homeowner paying more than necessary on a SVR.

There are millions of homeowners in need of a remortgage this year because their mortgage terms expire. As their mortgages end as well as their current interest rate, homeowners will either choose a new deal or their lender will move them to their standard variable rate (SVR). Avoiding the SVR is a better choice as remortgaging normally offers the lowest interest rate. By remortgaging, a homeowner could discover an interest rate half of what is available in a SVR. However, finding the right remortgage requires a bit of work, yet much easier than expected.

As expected, and forecasted, the Bank of England’s Monetary Policy Committee (MPC) has voted to keep the current standard base interest rate steady at 5.25%. This is despite the fact that the day before, the latest data revealed for the first time in three years, inflation dropped to target rate of 2.0%. Reaching the target would be thought to trigger a rate cut as reaching the level set by the Bank is the goal of raising the base rate. However, there are issues that cannot be overlooked in the economy and the MPC is moving forward cautiously.