There are many reasons homeowners should be considering a remortgage. One of course is to save money. Another is to secure a fixed rate and escape future rate hikes. Some homeowners could be considering an equity cash release while others could be considering a new deal to get peace of mind from higher rates or secure a deal before house prices possibly decline. Now that the Bank of England’s Monetary Policy Committee (MPC) has increased the standard base interest rate for the thirteenth consecutive time, remortgaging should be a consideration for all homeowners.

Inflation remained steady from April into May at 8.7%, which is more than four times the target rate of 2.0%. Experts have reissued a forecast for the Bank’s peak rate to reach 5.75%, up from a previous forecast only weeks ago of 4.8%. Because inflation remained steady, and there is not a scheduled MPC meeting set for July, the committee voted to take a more aggressive stance and increased the base rate by 0.5% to 5.0%.

With the forecast of a higher base rate ahead, remortgaging is a smart strategy. This is especially true for homeowners on a variable rate, and especially so for those that have come to the end of their mortgage term. At the end of their mortgage term, it would likely be the best financial choice to remortgage rather than let their lender move them to their standard variable rate (SVR). A SVR could be double or more the rate level found with a remortgage. The savings could be substantial for the homeowners when avoiding a SVR.

Choosing a fixed rate remortgage secures the interest rate for the length of the new term and shields the homeowner from further hikes that are forecasted to come.

Due to rising rates, there are expectations the housing market could see less demand from home buyers. If that occurs, then house prices could decline and with them property values. If property values fall it will be yet another hardship for homeowners. 

Part of the criteria for remortgage lending is the equity level, and that is determined by the property level and the level of debt. If the property level declines below the amount of debt, the homeowner is in negative equity and will be out of reach of a remortgage. For that reason, some homeowners are considering a remortgage before property values decline, especially newer homeowners.

The equity is also important for those that would like to cash it out during a remortgage. An equity cash release turns the built-up equity into money in hand for the homeowner. The funds can be used for whatever the homeowner decides whether to pay for a holiday for the family or upgrade and improve the home. Many have chosen to use the funds and make their home more energy efficient and save money.

There are many ways to save with a remortgage, and many benefits. The opportunity should not be overlooked, especially since there are only a few weeks before the next MPC meeting and another possible rate hike making borrowing even more expensive.

It is easy to shop for a remortgage online to discover what deals are available. Visiting the website of a remortgage broker could put numerous quotes from a variety of lenders in hand to review and compare. The homeowner might also be offered an exclusive deal from a lender not offered directly to borrowers when remortgage shopping with a broker. Of course, the homeowner could also visit individual remortgage lender websites individually to gather quotes to review.

To take advantage of the current rates and offers in remortgaging, homeowners should consider shopping soon as the weeks will pass quickly and yet another MPC meeting and rate hike could happen. The next scheduled meeting is 3 August.