No one could have expected just a few years ago that remortgage offers would dip below the 3% interest rate.  Despite the Bank of England’s Monetary Policy Committee leaving the standard base rate at 0.5% lenders have been all over the board with their offers.  The MPC rate remained steady and unchanged and yet lenders have increased their interest rates due to the ever rising cost of borrowing for lending on the global market. 

Lenders were forced to increase the cost to borrowers to help them match the costs they incurred in servicing the loan and funding it.  Borrowers that had their mortgage deal end and were moved to their lender’s standard variable rate (SVR) were faced with interest rates that were sometimes double the offers on the market for fixed rates or trackers.  Unfortunately many homeowners became prisoners of their mortgages having been moved to a higher and risky SVR but unable to secure a remortgage to take advantage of lower rates.

The Bank of England in August sought to bring relief by helping lenders fund their loans off of the global market which insured loans would be cheap.  The scheme appears to be helping with first time buyers expected to return to the housing market in higher numbers this year and for demand to grow from homeowners seeking out lower interest rate remortgages.  Already the interest rates have started to dip below 2% for some offers and rather than jumping in to take out a deal some homeowners are staying on the fence expecting a better deal.  For some the risk of waiting can be worth it, while others should more carefully consider what is at stake and what it is costing to wait for a better deal.

The best remortgage deal in a decade could be waiting in the wings, but if the remortgage deal saves money despite not being the lowest deal yet found, then perhaps that remortgage is in itself the best deal of all.