The Bank of England’s Monetary Policy Committee (MPC) met in June and raised the standard base interest rate to 5.0%. The increase surprised some experts as the jump was due to a 0.50% increase, and not the expected 0.25% increase forecasted. There were some that had predicted a 5.0% base rate due to there not being a MPC meeting in July and due to stubborn inflation which is still at more than 4 times the Bank’s target of 2.0%. With inflation reported at 8.7%, the MPC took a more assertive approach to fighting inflation and move it into a downward trajectory. The continued concern about inflation means there are expectations of more rate hikes to come.

Earlier in the week, a forecast of the base rate reaching a peak of 5.75% was a frightening expectation, but now it is expected to reach at least 6.0% next year. 

If the base rate reached this level, it could average almost £3,000 more per year for homeowners with their repayments. 

The expectation of the hardships on homeowners is pushing some experts and think tanks to call upon government to consider the financial strains of the current rates on homeowners and the possibility of the impact causing affordability issues that might  lead to repossessions of properties.

Other experts are warning that any help to homeowners could trigger inflation to remain steady or perhaps increase the inflation rate. For them, there is a need for the rates and consequences to be allowed so as to impact inflation and push it downward toward target and they want government to remain restrained in any financial assistance.

Inflation experts believe that the current inflation rate is a greater problem to the UK economy than higher interest rates.

On a personal level, for homeowners the Bank’s base rate is a concern that could have some considering selling their home and escaping the repayments rather than face repossession.

It should not be overlooked that perhaps the tool to surviving the financial strains from the current economy could be a remortgage. It might be the way to gain savings and peace of mind as rates rise in the coming months.

Experts encourage all homeowners to consider shopping for a remortgage. By gathering quotes from remortgage brokers and lenders, the homeowner could discover savings. They could also choose a fixed rate remortgage and lock in the rate to protect against the forecasted rate hikes to come.

Shopping for a remortgage could be helpful to any homeowner. Those not close to having their mortgage term end could either prepare and understand what might be ahead or choose to remortgage early to avoid future higher rates. Those that are close to having their mortgage term expire could avoid the higher rate and riskier standard variable rate (SVR) by choosing the usually lower rates offered with a remortgage. For those homeowners that have had their mortgage term end and allowed their lender to move them to their SVR rather than remortgage, they should certainly shop to discover what deals are available and the savings possible.

Those moving off a variable or tracker loan to a fixed rate could find it offers peace of mind knowing despite any future rate hikes they are shielded. 

Gathering remortgage quotes to compare and review is simple to do by shopping online. The website of a remortgage broker could offer numerous quotes from a variety of lenders at once. Brokers could also have exclusive deals not offered from lenders directly to borrowers. Of course, homeowners could also visit individual remortgage lenders to gather quotes.

Once quotes are in hand, a homeowner has information to help them create a strategy to avoid paying more than necessary by avoiding future rate hikes. Since there is no obligation in gathering quotes, it is a simple and quick way to find a path to savings and surviving the current economy rather than taking on stresses and having to make hard decisions later on.