Homeowners should be alert to the rapidly changing lending environment. One could end up paying more than necessary if a smart financial strategy is not put in place. There are many factors at play taking a toll on a household budget, including inflation, higher energy costs, and higher interest rates. Of course, many households are still in recovery from the impacts of the global pandemic. The need for savings and relief is deep. There are benefits and opportunities available to homeowners through remortgaging that could offer savings and stability as interest rates rise to combat inflation.

Many are choosing to remortgage and doing so early if needed. Some homeowners not yet near the expiration of their mortgage term are accepting a penalty fee to end their term early to allow remortgaging with current rates. The ability to gain a current rate rather than face higher rates later on when their term is due to end is seen as a choice that could certainly offer substantial savings despite the penalty fee. 

Others, those close to having their term end, are shopping for deals. Online searches have increased for terms related to remortgaging, while remortgage lenders and remortgage brokers are busy with those seeking a deal in hopes of avoiding the next interest rate hike.

Although, it should be noted that it does not take the Bank of England’s Monetary Policy Committee (MPC) to announce an increase for lenders to make changes with offers. The latest announcement of government budget intentions caused quick action by lenders. In a matter of days, mortgage and remortgage products were reduced drastically and rate offers increased. 

While the Bank’s standard base rate is at 2.25%, borrowers are facing rate offers on average of almost 6.0%.

The time to remortgage for all homeowners intent on saving money rather than pay more due to higher interest rates was yesterday. With passing days, the current best rates could disappear, and homeowners would miss out. In other words, experts say remortgage as soon as possible. 

The most popular remortgage product is a fixed rate deal. It offers relief from any further interest rate increases. The longer the term the rate is locked the better for most homeowners when forecasts call for rates to increase into next year and perhaps remain rather than decline.

The Bank of England’s MPC has increased the base rate during each of the last seven consecutive meetings. In December 2021, the rate was at an all-time historic low of 0.1% and is now at a 14 year high of 2.25%. Average lender offerings are now at levels seen prior to the economic crisis.

The next MPC meeting is in November and another in December. Though October does not have a scheduled meeting, the Bank has given notice that it will not hesitate to hold an emergency meeting should the need arise.

The first step to a remortgage is shopping for one. It is simple and quick to shop for a remortgage online. By visiting the site of a remortgage lender, a homeowner could have a quote to review in a matter of minutes. Visiting a remortgage broker, which works with many lenders, could put numerous quotes from a variety of lenders in hand to review and compare for the best remortgage opportunity.

Experts agree that a remortgage should not be overlooked by homeowners no matter where they sit on their current term. Whether their term has already ended and they have yet to remortgage and were moved to a risky lender’s standard variable rate (SVR), are close to having their term end, or they are not yet near the end. Shopping for a remortgage will give essential information in which to make a decision if remortgaging now or later is the best course of action.