There is a lot of frustration in the news these days. Nobody likes it when things are tough, and financially things are tough right now. It only takes a little bit of looking around to see that perhaps that frustration is not so bad when things could be worse, and for others outside of the UK it certainly is in some areas. However, thinking things could be worse doesn’t calm the fear and worry when you wonder if you are going to be able to afford your home or not, and that is a real situation for many.

Politically the blame is being placed all over. Some homeowners are blaming the lender for approving them for a loan when they knew things might change and interest rates could rise. Could that really be the lender’s fault when everyone knew the rates were at an all-time historic low due to the pandemic? Really? An all-time historic low, not even lower during the Great Slump or also known as the Great Depression.

Surely everyone expected things would return to normal or as close as possible to normal in the near future. Interest rates were never going to remain at almost zero. What was affordable at that level of an interest rate might not be so affordable if that interest rate were to double, triple, or grow by ten times as much or even more. It was inevitable that interest rates were going to rise and those with variable interest rates were going to be paying more.

Unfortunately, many are focused on the here and now when they are in pursuit of a dream, and homeownership is a dream come true. Hopeful home buyers shop homes and they are like children waiting anxiously during the holidays. Will they or won’t they get the property? If they do, there is little attention as to what will come if the economy changes, if their job stability changes, if someone becomes ill, or if something major happens and they have to be able to afford a major fix to the property. 

The focus is on the now of shopping, choosing, and getting approval for a loan. Home buyers are often quick to accept that their first choice in an interest rate is out of reach, but another is available if they would like to accept it. That is part of buying a home, but it is often overlooked as to the what ifs and maybes could occur in the near or distant future that might make things feel differently than they do when they are deep in the honeymoon phase of being a home buyer.

Reality has set in for many homeowners. The honeymoon stage ended rapidly for many. It is true also for home buyers since many are finding that what was available only a month or so ago no longer is within reach. They could be considered the lucky ones, for there are homeowners caught completely unaware of how rising interest rates would impact their future.

In December 2021, the Bank of England’s Monetary Policy Committee (MPC) increased the long standing near zero rate of 0.1% to 0.25%. A mere jump, but in actuality it was more than double. It continued to be increased during each of the next nine consecutive meetings of the MPC in response to growing inflation. The rate was raised to 4.0% this month. That is the highest rate in 14 years, which means there are 14 years of home buyers or even more that have never paid on interest rates so high.

The problem is for the homeowners that are coming to the end of their current mortgage term. Those on fixed rate deals will not have been impacted by the higher rates until their term ends. At that point they can remortgage, or they could allow their lender to move them to their standard variable rate or SVR.

A SVR is a variable rate as the name implies and therefore it does not help the homeowner escape rate changes. Variable rates can be a good choice when rates are expected to drop, but in comparison to a remortgage they could be costly whether rates are declining or rising

. SVRs are usually connected to an interest rate that is higher than what could be found on a remortgage, and when rates are rising it exposes the borrower to rate increases and higher repayments.

A remortgage is usually a lower interest rate than the lender’s SVR. A borrower could also choose a fixed rate deal which locks in the rate for the duration of the term and protects from any rate increases.

Homeowners at the end of their historically low fixed interest rate are not going to discover interest rates like they previously paid on, but there are savings to be found. Rather than focus on who or what is to blame if there are financial difficulties with higher rates, it is important to focus on how that impact could be reduced as much as possible.

There is no time to be wasted in shopping for a remortgage. It can be done online for quick and easy quotes. Visiting lender websites will offer up quotes to compare, but a one stop shopping experience to get many quotes from a variety of lenders to review and compare is possible by shopping with a remortgage broker. Exclusive deals could also be found with remortgage brokers as well, so not only could many quotes be discovered but a deal not offered directly from a lender.

In obtaining quotes and seeking a remortgage, a homeowner could avoid the higher interest rates of an SVR and with a fixed rate shield themselves from further rate hikes. Savings are found in choosing a lower interest rate and avoiding further rate hikes.

Saving money is an important strategy and a remortgage could be helpful. There might be other schemes or lender specific offers that are more helpful than others. This is why loyalty should be pushed aside and a homeowner should seek the best deal for their needs.

In the end, the problems and mistakes made, the global events that caused financial issues will be revealed, and rather than put energy toward discovering the why, energy should be focused on not only surviving the current financial strains but perhaps thriving and doing so as soon as possible.