Borrowing is now more expensive. The standard base interest rate set by the Bank of England’s Monetary Policy Committee (MPC) was doubled from 0.25% to 0.5% during the most recent meeting on 3 February. The move to hike the rate was expected due to the fast growing inflation rate. However, expected or not, it will prove to be a wakeup call to those that could be put into financial hardship as interest rates move away from the historic lows experienced due to the pandemic.

Now households are dealing with higher interest rates as well as inflation. Household budgets are sure to be taking a hit as costs increase and winter weather is causing consumption of higher energy costs as well.

The MPC did not have a vote of all members for the increase to 0.5%. The vote was five to four. Those four actually were keen to vote for a higher increase to 0.75%.

There are forecasts for the rate to be at 1.0% by May and to almost 2.0% by November.

Experts are encouraging homeowners to shop for a remortgage sooner rather than later. Due to the savings benefits available there is no time like the present to take action and gain relief for one’s household budget.

Homeowners that had their mortgage term end and without a remortgage were moved to their lender’s standard variable rate (SVR) are at risk of facing higher repayments. It could push them into a rush to remortgage situation and paying more than necessary while they await the process. According to recent reports, the lenders’ average SVR could be double or more than what is available with a remortgage.

According to the Bank of England, with inflation at its highest rate in more than 30 years and higher interest rates it could produce the biggest annual reduction in spending power since 1990.

For homeowners seeking to save money, shopping for a remortgage online is quick and easy. Going to websites of lenders or doing one stop shopping with a remortgage broker site could put quotes into hand so that homeowners can discover the best remortgage for their needs. Brokers often have exclusive deals not available from lenders directly to customers, so it could turn up a special deal.

By obtaining a remortgage, especially a fixed interest rate remortgage that could lock in a low interest rate, a homeowner could save now and save against rising rates, which are forecasted to happen again and again this year.