The demand for remortgaging has grown due to rising interest rates and the impact from inflation. To assist household budgets homeowners are seeking to end their mortgage term early to allow them to remortgage. Rather than wait until their mortgage term ends and possibly face higher interest rates, taking on a penalty fee and ending the term now allows them to choose from today’s remortgage offers. 

A popular remortgage choice is one with a fixed rate. Locking in the interest rate for the length of the term is definitely a smart choice when interest rates are climbing. However, there are other reasons to remortgage as well, including cashing out built-up equity. With an equity cash release remortgage, a homeowner could have cash in hand for any need they desire, including improving and upgrading the home which in turn could add more value. One popular choice for the funds would be to improve the energy efficiency of the home before winter months.

While being able to remortgage and choose from current interest rate is choice for some, the decision is not right for every homeowner. Some homeowners could find the penalty fee to be costly. Others could find taking a risk and waiting out their term to be the best choice especially if their interest rate is much lower than current offers and they have many months left on their current deal.

It should be noted that another, if not several, interest rate hikes are expected. The current standard base interest rate is now at 1.75% having been increased in each of the last six consecutive Bank of England’s Monetary Policy Committee meetings since December 2021. 

Many homeowners will soon be coming off of mortgage terms that were obtained when the base rate was at an all-time 300 plus years historic low of 0.1%. The history making rate was in place through the height of the pandemic and lockdowns and was the rate when the first increase occurred last December.

While ending a mortgage term early is not the best decision for every homeowner, it would be smart to at least shop for a remortgage to determine what offers and benefits are available. It would put quotes in hand to review. Doing so would give insight as to what deals are possible and what help it could offer in the coming months and years when inflation and interest rates are expected to continue rising.

The next MPC meeting will be held on 15 September, so there is still time to take action and get started or just get important information about remortgaging. It is easy to get quotes online. A homeowner can visit a lender site and most will offer quick quotes after answering a few questions. By going to a remortgage broker site, a homeowner could have quotes from various lenders in which to compare. They could also possibly discover an exclusive broker deal not found directly from the lender.

Maybe ending a mortgage term early to remortgage with current rate choices is not for every homeowner, but it is smart to shop for a deal to determine what offers are available for deciding whether to remortgage now or later.