Last year, as the new 2022 was on the horizon, no one could have foreseen the issues that would befall the year and hit household budgets and cause financial strains not felt in decades. We had begun to leave the pandemic in the past as things slowly returned to normal. Inflation was not yet causing hardships, and the war in Ukraine had not started. There were shortages due to supply issues, but all was expected to normalize in the days ahead. Jobs were abundant, companies were returning to normal output, and borrowing was still extremely cheap with historic interest rates in place.

Low, historic level interest rates had put the dream of home ownership in front of many who had pushed the thought aside. The interest rates were so affordable that it almost seemed putting off buying property would be a missed opportunity.

Because of the rush to buy, spurred by interest rate levels, but even more so by the pandemic lockdowns, house prices soared. The average house price reached new record highs month after month and yet buyers remained in the market. 

Once the war in Ukraine began to impact not only food supply, but fuel supply and energy as well, inflation had started to take a tight grip on budgets. While decisions by those hardest hit offered a path to weathering the financial storms, such as not using as much electricity or foregoing usual food purchases, the sacrifices required not only continued but mounted.

There were stories of people planning to not turn on their heat during the winter to survive financially. Food shortages and affordability were straining charities and those that once could give were now finding it difficult to afford their own needs.

Meanwhile, energy costs, inflation, and interest rates increased and budgets were further strained.

There was a group of consumers that were about to be caught unaware of just how difficult it was going to be and how everything could drastically change financially in one year. Homeowners, especially newer homeowners, were going to face a scenario they were not prepared for and perhaps were uneducated as to the possibility of what might occur as interest rates rose.

Homeowners had been enjoying lower and cheap interest rates. Many had rightly, and smartly secured fixed rate deals with their loans. This locked in the low rate and protected them against any increases they would occur. The shield against higher repayments would end though with the expiration of their mortgage term. 

There are millions of homeowners that are due to have their deal expire this coming year. Many will be coming off a deal with an all-time historic low rate and will have to choose from rates that have grown above offers not seen in over a decade. Their repayments will be more costly and for some it could be unaffordable.

Experts have warned since rates began increasing in December 2021 for homeowners to look at their house mortgage and become familiar with the length of term, the type of loan, and their interest rate. Doing so will help a homeowner prepare and be better suited to shop for a remortgage, which could offer savings when it could be critical to do so.

At the end of a homeowner’s term, they could shop for a remortgage and choose from the offers available to them or their lender will move them to their standard variable rate (SVR). When rates are on the rise, a SVR is risky and could have the homeowner facing every rate hike that occurs. Also, a SVR is usually higher than the rates being offered with a remortgage, so the SVR is costing more and depleting the budget when savings could be helpful.

A remortgage could offer savings from a SVR, and if a fixed rate remortgage is chosen, it could offer savings from further rate hikes through the duration of the new term.

It is simple and easy to obtain quotes online for remortgage offers. A remortgage lender will likely offer quick quotes on their website. A remortgage broker could offer numerous quotes from a variety of lenders from their website. Brokers often have exclusive deals, so they are certainly worth shopping with for that possibility. Having quotes to review and compare allows a homeowner to determine what offers are currently available and allow them to prepare for the future or act now.

Some homeowners are taking on penalty fees to end their mortgage term early. It allows them to remortgage with current rates rather than face higher ones in the months ahead when their term was due to end. This is not a choice every homeowner should make, but it is a possible one and certainly worth exploring by obtaining more information and talking with experts.

In the year ahead, homeowners should prepare for higher interest rates and for the possibility of losing value on their property should the housing market lose hopeful buyers. The loss of property value could put some homeowners in risk of their value falling below the debt level of their loan. This is called negative equity and would exclude a homeowner from remortgaging and therefore all the benefits of doing so.

There are programs being put into place by some lenders to help homeowners from losing their property such as putting a homeowner on an interest only loan, but they are not long-term solutions and homeowners should ask what consequences could occur in the future should they take advantage of these programs. For some, they are the solution to their financial strains in the coming year and looking into what help is available sooner rather than later is the key to getting help or not.

A remortgage may not be the right answer for every homeowner, and certainly taking on a penalty to remortgage early is not the right answer for every homeowner. However, it could be the right answer for many, if not most, and shopping for a remortgage online is easy. Quotes obtained might be valuable and helpful information to prepare.  Planning could help make the year ahead easier, and possibly a truly happy new year, despite the ongoing financial woes and oncoming recession.

It is true that the financial outlook could be hard, but there are opportunities to take advantage of and help is available, even if that help is only advice from experts to help motivate one to take action. The year ahead could also inspire those that can help to develop more ways to do so for those most impacted. 

The main thought for the year ahead is prepare and discover what is available to help where help is needed. For homeowners, it might be a remortgage. As experts say, a remortgage could be helpful and finding out if it could be is as easy as getting a quote or quotes online.