Borrowers beware the low interest party is ending.  Homeowners that have been content to sit on their lender’s variable rate without a care and those that have put off getting a remortgage while deals are cheap are all in need of paying attention.  Hopeful homebuyers that had thought borrowing would remain cheap while they waited for house prices to bottom out are wrong.  Despite the Bank of England’s Monetary Policy Committee (MPC) leaving the standard base interest rate steady at 0.5 per cent is not deterring lenders from increasing their own independent variable rates.

The news that lenders are increasing their standard variable rates (SVR) is not good for those that have had their current mortgage deal end or for those that have the days ticking off the calendar till they move onto their lenders’ SVR.  For while some may consider themselves out of danger the other side of the story is that remortgage deals are changing too.  Lenders have been pulling their cheapest remortgage deals for months.  Some to be replaced with slightly higher deals while others were not replaced at all which left fewer deals available for homeowners.  Remortgage deals of tomorrow could likely look very different from remortgage deals available today.  Homeowners should beware that waiting too long could cost them a cheaper remortgage deal.

Homeowners are being warned to carefully consider the increases proposed and determine if they can handle an increase or they should seek a remortgage.  The increases are not gentle either.  For a mortgage payer on a low 4.00 per cent variable repayment a 0.5 per cent increase on £150,000 would mean an extra £43.  Halifax, the UK’s largest mortgage lender, is increasing their SVR from 3.50% to 3.99% in May.  Halifax is not the only lender to give notice of an increase for several have followed suit and are increasing their SVR as well. 

Borrowers can find cheap deals on mortgages and remortgages but it will take shopping around and deciding to take advantage today of the deals available now.