Possessing a time machine would be nice, not only for personal and emotional reasons, but for many it would be used to return to the moment their financial situation tipped toward struggle. The initial tipping point is often subtle. There are of course moments where one’s financial downfall is like a rug being pulled from beneath one’s feet, but many have it happen in small incremental moments. It appears that this one or the next setback will be difficult but manageable. Homeowners are dealing with that specific scenario, and it is leading to more and more mortgages falling into arrears.

The news is now focusing on the positive and optimistic side of what is happening in the economy. Inflation saw another dip in August as it declined from 6.8% to 6.7%. It is progress but it equates to little relief at this very moment for financially strained households. Inflation will continue to hurt budgets, winter is approaching, and energy costs will increase as homes are kept warm, and the pandemic caused more than illness for many as it left savings depleted, or budgets dented.

The Bank of England’s Monetary Policy Committee (MPC) decided to step back from the recent trend of every meeting resulting in a rate hike. The MPC had voted in fourteen consecutive meetings since December 2021 to raise the standard base interest rate. It was then almost zero at 0.1% at the end of 2021. The September meeting, only days ago, resulted in a vote to allow the rate to remain steady, leaving it at the current rate of 5.25%.

The vote to freeze the rate was unexpected. The majority of economists polled forecasted another rate hike of 0.25%. The stay of the rate is good news for borrowers. It also has eased the gloom and doom expectations for the economy. So much so, that many believe the peak rate is where it sits now. Inflation will continue to slide downward and sometime next year reach the target rate of 2.0%. Maybe. The outlook is positive but cautious.

No more rate hikes. Lower inflation. The economy is on the way to repair and rightly so having weathered Brexit and a global pandemic. 

With the lending market embracing a more optimistic outlook, many lenders have chosen to lower their interest rates on mortgage and remortgage products. While the MPC did not cut the base rate, lenders have cut their own rates. The competitive mode in the lending market will help many no doubt, but there are some that the savings will do little to ease their struggle.

Many homeowners have been struggling with affordability. The most likely are those that secured their property when borrowing was historically cheap. Having secured a two-year fixed rate deal in 2021 they were able to avoid the rate hikes and were shielded from the higher costs. However, at the end of their mortgage term, the fixed rate no longer existed, and they were faced with higher borrowing costs.

There are hundreds of thousands that will come to the end of their mortgage term in the final months of this year during the holiday season.

Some this year may have been caught unaware that their affordable repayment could so drastically change. Some might have been completely oblivious to the fact that a rate could actually change at all but change it did.

At the end of the homeowner’s mortgage term the option is to remortgage or to allow the lender to move the homeowner to their standard variable rate (SVR). Depending on when that happened for a homeowner, when they were moved to a SVR, it could have been a gradual increase in their borrowing costs and repayments or one quick and shocking switch.

A remortgage could not only be the choice to offer savings from a higher SVR, but a fixed rate remortgage could lock in the rate and help the homeowner avoid increased costs should the MPC or the lender decide to raise the rate.

Homeowners could easily determine how and if a remortgage might be helpful. Shopping online by visiting a remortgage broker website could put numerous remortgage quotes from a variety of remortgage lenders in hand to review and compare. Brokers often have exclusive deals from lenders not offered directly to borrowers. The option to visit website to website of remortgage lenders to gather quotes is also an option.

There is no time machine unfortunately for those wishing to return to either where things became financially difficult or to the historically low interest rates available two years ago, but there are possible safety nets for those with white knuckle grips on the property ladder. 

Speaking directly to the current lender as soon as possible is suggested. Lenders may have an option available for those struggling such as allowing interest only payments for a while. There are experts that could also help, such as a remortgage broker that could likely have industry information as to which lenders would be more open to dealing with a homeowner that has a difficult remortgage situation such as someone self-employed, or a couple going through or having completed a divorce. 

There is of course the quick and easy process and excellent opportunity to shop online for a remortgage. The information in quotes gathered could be quite helpful in assisting a homeowner build a strategy to survive their current financial storm or avoid further hardship. A remortgage might not be a time machine, but it certainly might be a quick journey to financial relief and peace of mind.