According to several reports over the years, many homeowners are unaware of what a remortgage is or what benefits it could offer. This shows that despite experts encouraging all homeowners to shop for a remortgage early, many are missing out. Unfortunately, in the current economy, if a homeowner is unaware of remortgaging and they come to the end of their mortgage term without the knowledge of what to expect they could be in shock and the hit to their household budget could take a long time to repair. 

The UK housing market has remained resilient due to the strong hopes of those yearning to become homeowners. The ability to own a home used to be an easier dream to make come true than it is today. New homeowners are older than in years before due to the difficulty in saving for a deposit, qualifying for a purchase, and the higher costs of starter homes. However, when the pandemic impact to the economy caused the Bank of England’s Monetary Policy Committee (MPC) to lower the standard base rate to an over 300-year historic low rate of almost zero, the cost of borrowing had not been cheaper in centuries and homeownership dreams came true.

Due to the possible higher repayment costs when a homeowner’s mortgage term ends, experts are encouraging all homeowners to consider shopping for a remortgage. Many are coming to the end of their term and will be losing the low fixed interest rate they secured when lenders were offering historically low mortgage rates. Due to the pandemic, the Bank of England’s Monetary Policy Committee (MPC) lowered the standard base interest rate to an all-time over 300 year low of 0.1%. With that low base rate, came offers from lenders that were in themselves also historic lows and borrowing became cheaper than could have been imagined only years prior.

Experts are encouraging homeowners to prepare for higher repayments and to do so they should get familiar with their current mortgage deal and start shopping for a remortgage sooner rather than later. Many homeowners are simply happy to get a mortgage and their property. Focus quickly moves on to planning their move and turning their house into a home. It would be easy to forget about the details of their mortgage loan and many do. 

The expectation of the Bank of England’s Monetary Policy Committee (MPC) increasing the standard base interest rate during the March meeting also sparked a competitive lending market for mortgages and remortgages. Demand had already declined due to the higher cost of borrowing, and with yet another increase lenders prepared by offering more attractive deals which included a slight decrease in the their interest rate offerings. Fortunately 

The Bank of England’s Monetary Policy Committee (MPC) increased the standard base interest rate last week. It was the eleventh consecutive meeting for the MPC to hike the rate upward. This has proven to be a concern for experts for homeowners. Only a bit over a year ago, the rate was at an historic low, and now it is the highest it has been in over a decade. The change in a homeowner’s repayment levels could be dramatically different and for some it could lead to a lack of affordability.