The UK economy is putting a strain on households. Inflation along with rising fuel and energy costs are taking money out of budgets that had already been strained due to the global pandemic. Experts are encouraging homeowners to take advantage of an opportunity they have to save money and build in a financial safety net against rising interest rates.

Due to the growth of inflation, the Bank of England’s Monetary Policy Committee (MPC) has sought to slow it down by raising the base interest rate. Their last three consecutive meetings, held in December, February, and March, resulted in rate hikes. The rate had been stationary at 0.1% and due to the rate increases moved to 0.75%. The next MPC meeting is on 5 May and could result in yet another rate hike to 1.0% or more.

Inflation’s target rate set by the Bank is 2.0%, but now could be growing to 8.0% by the end of spring. 

The strain on households is quickly seen as the cost of necessities becomes a burden. Food in general is definitely more expensive these days as well as fuel, and energy costs. The detail in which households are changing their spending habits is evidence as to the strain on budgets. For instance, many households are using apps to help determine their energy consumption on household devices to try and reduce costs. 

Experts are encouraging homeowners to consider a remortgage to help their situation. By seeking a remortgage, a homeowner could not only find savings in their repayments, but also lock in a low interest rate with a fixed rate remortgage that would offer a block against further rising rates for the length of their term.

The benefit of remortgaging could also offer the ability to put cash into hand to help ease the strain on their monthly budgets. By choosing an equity cash release remortgage, the homeowner can cash out their built up equity to help their current needs. The money can be used in any way the homeowner desires, but it is thought many will pay down or consolidate debt and perhaps build up an emergency fund.

Homeowners that have had their mortgage term end and have been moved to their lender’s standard variable rate (SVR) are likely to discover financial relief with remortgaging. The SVR could be highly risky with rising rates it could happen quickly and leave the homeowner rushing to find a remortgage or the funds to pay more. However, all homeowners are encouraged to shop for a remortgage. Even those not close to having their mortgage term end could consider a low interest rate deal of today rather than face higher rates when theirs expires.

Shopping online for a remortgage could be fast and easy with the ability to go to websites of lenders and obtain a quote. Also, consider remortgage brokers as they offer many quotes from one website and homeowners can quickly compare offers and perhaps discover their own safety net against the current state of the economy.