Homeowners are struggling to stretch their financial budgets according to several reports. Not only has inflation long taken a toll as prices have surged upward and remained, but energy costs have put some in the position to have experienced the past winter months choosing between food and heat. However, the reality is that many have yet to experience the next financial stress coming their way when their mortgage terms end.

The two-year mark is near for thousands of homeowners that secured a two-year fixed rate mortgage when lenders were offering historically low interest rates. The Bank of England had lowered the standard base rate to an over 300 years low of almost zero at 0.1%. Borrowing was cheap and as the pandemic lifestyle was pressing the desire for more space both in and out of the home to cope, hopeful home buyers flocked to the market.

The UK housing market experienced an unprecedented demand amid a global pandemic. The average house price broke record highs time and again as home buyers took advantage of the once in a lifetime low interest rates attached to mortgages.

The most popular mortgage at that time was a fixed rate deal. It is unsurprising that home buyers would seek to lock in the low interest rate they had secured. It would ensure their ability to budget for the same repayment month after month and would shield them against any rate hikes throughout their term. For many, that term was two-years.

Now as homeowners come to the end of their mortgage terms, they will face more expensive repayments as interest rates are much higher than they were two years ago. The once historic low rates offered by lenders are no more. 

At the end of their mortgage term, homeowners have a choice of either remortgaging or allowing their lender to move them to their standard variable rate (SVR). A remortgage is considered a smart strategy, and especially so when there are threats of further rate hikes. The next increase in the base rate could be only days away when the MPC gathers for the scheduled May meeting.

A remortgage could offer savings. A SVR which could be double or more the rate that could be found with a remortgage deal. Not only could a SVR be more costly, but the rate would be subject to further increases. A remortgage with a fixed rate could offer savings from a SVR and lock in the interest rate to offer savings from further rate hikes.

Inflation was last reported at more than five times the Bank’s target rate of 2.0%. The base rate is now at 4.25% and the May meeting is forecasted to end with another rate hike of at least 0.25%. Of course, the MPC will have new inflation data to review, and it will determine their strategy. It should be noted that when they expected during the last inflation report for it to drop below double digits to a little over 9% it was reported at 10.1%. Inflation has remained stubborn and is powered by consumer spending, which has yet to be significantly slowed with higher interest rates.

While the historic low rates that offered cheap borrowing are gone, there are still savings to be found with remortgaging and experts are encouraging homeowners to shop for one sooner rather than later. By preparing for the higher repayments that will come, homeowners are not blindsided by the impact on their budget due to their mortgage term ending.

Remortgage shopping is easy to do online. Numerous quotes from a variety of lenders could be had in a matter of minutes from the website of a remortgage broker. Brokers could also offer exclusive deals not offered directly from lenders to borrowers. Of course, a homeowner might also consider visiting a remortgage lender website and then others to gather quotes to review and compare.

Homeowners don’t have to suffer the shock of losing their once affordable interest rate. Remortgaging is but one option, and there are some lenders that are offering special unique opportunities to help homeowners struggling. 

To discover what remortgage offers are available, which could include a fixed rate deal, a longer term than before, or even an equity cash release deal which turns built up equity into cash for the homeowner’s personal needs, the opportunity to find relief and peace of mind might be found by simply shopping for a remortgage online.