Homeowners need to learn all they can about interest rates to make the most of their financial health both now and the in the future.  There are many homeowners that close on a purchase and remain in the dark about how changes in interest rates will impact them years after the initial purchase.  It is estimated that there are hundreds of thousands of homeowners that could benefit from a remortgage but they don’t even know they need one.

One of the biggest misconceptions by homeowners is that as long as the Bank of England’s Monetary Policy Committee (MPC) leaves the standard base interest rate alone then they are safe against rising interest rates.  The fact that the MPC has left the standard base interest rate at 0.5 per cent for three years now can lull homeowners into a false sense of security.  They believe that if the MPC leaves interest rates set then they are in no danger of rising rates.

The fact is that homeowners obtain a mortgage deal for a set term.  Once that term is over they convert to their lender’s variable rate.  That rate is based on the MPC rate but it is increased and reduced at the will of the lender.  Should costs increase for the lender to lend money then that cost is pushed onto the consumers by raising their variable rate as well as the offerings available on mortgages and remortgages.  Remortgage offerings therefore can rise up or down whether the MPC leaves their rate changed or not. 

For a homeowner that is unaware of what kind of mortgage deal they have, what their interest rate currently is or when their deal is due to end it is time to get familiar with their mortgage and figure out if a remortgage is needed.