With the threat of rising inflation comes the threat of the Bank of England’s Monetary Policy Committee (MPC) increasing the standard base rate. That threat has pushed many homeowners to seek out remortgages and secure a low rate now. Though the MPC left the rate unchanged in March, inflation is growing and one committee member believes that the hike in the interest rate is long overdue.

Andrew Sentance had been the lone MPC member for many months looking for an increase. His usual vote has been for the standard base rate to increase from its now 0.5 per cent to double at 1.0 per cent. Inflation is now above double the Banks’s goal rate at 2.0 per cent and running at 4.4 per cent. It is for that reason that other MPC members have started joining Sentance in voting for an increase. In March the vote for an increase was 3 to 6.

Another member of the MPC, Spencer Dale, voted in March to increase the rate with Sentance along with Martin Weale. Dale also voted for an increase in the rate during the February meeting of the regulators. In responding to questions about his voting for the increase Dale responded that he believes inflation will remain above target for the next year or so. He also stated that should recovery be threatened he would not push for a rate increase.

For those homeowners believing that the interest rate change is enough of a threat to push for a remortgage should also consider other factors. Despite the Bank’s standard base rate remaining unchanged that does not mean that rates from the lenders will remain unchanged. Recently there was an increase in the swap rates (the rate at which lenders borrow from one another) and that increase was passed on to borrowers. The swap rate increase caused the best remortgage deals to be pulled from offer and replaced with higher rate remortgages. This means that homeowners must take into consideration more than the threat of an interest rate hike when it comes to deciding when to remortgage.