Homeowners have shown demand for remortgages in the effort to save money in the midst of rising interest rates causing higher repayments. Without a remortgage at the end of a mortgage term, a homeowner is moved to their lender’s standard variable rate (SVR). The risky SVR could not only be connected to a higher interest rate than what is found with a remortgage, but it is subject to further rate hikes. A fixed rate remortgage choice could have a better interest rate and shield from any further interest rate increases ahead. 

For a homeowner trying to build a strategy to survive and perhaps even thrive in the year ahead, researching forecasts and tidbits of knowledge can go a long way in planning. Unfortunately, trying to wade through the negativity and discover something that is helpful is difficult. The current forecasts include higher interest rates to come, continued financial impact from inflation, higher energy costs, a possible recession, falling property values, and more. It can be overwhelming to try and find words of wisdom to follow in the hopes of weathering through the difficulties experts have told to expect. 

Perhaps there has been no better time to shop for a remortgage this month. The current week and last has seen lenders bringing new remortgage products on the market for homeowners to choose from with some offerings involving attractive incentives. For instance, one lender is not only offering a competitive interest rate, but also cash back of £1,000 to the borrower. Lenders are anticipating a higher demand for remortgages as the Bank of England’s Monetary Policy Committee (MPC) meets on 2 February to likely increase the standard base interest rate. It is expected that homeowners yet to obtain a remortgage will feel the pressure of higher rates and seek to find relief for their budgets.

The weeks have passed bringing the next Bank of England’s Monetary Policy Committee (MPC) closer to commencing. There was not a meeting scheduled in January, allowing borrowers to prepare between the December 2002 meeting and the next one on 2 February. The last nine consecutive meetings since December 2021 have resulted in a rate hike in response to growing inflation. The current rate is 3.5% after the last increase of 0.50%.

The Office for National Statistics (ONS) released their November data and with it the first monthly decline of the average house price in a year. The average house price declined by 0.3% between October and November. It also brought decline in the annual house price growth rate to 10.3%, down from the recorded 12.4% in October. Lower than the October record high of £296,000, the November average house rate of £295,000 reported by the ONS is still much higher than the average that existed prior to the pandemic.

Homeowners in December were facing the holiday distractions and likely trying to cypher through the information on what to expect from the coming year. Fewer sought out remortgaging, but fewer home buyers were in the market as well. According to a statement by LMS CEO Nick Chadbourne, “Mortgage activity slowed in December as borrowers expect rates to drop in the new year.”