Homeowners are certainly facing much better remortgage offers now than just weeks ago. Lenders have become competitive as economic optimism has grown with the lowering of inflation and the Bank of England’s Monetary Policy Committee (MPC) making a cut to the standard base interest rate in August. It was the first cut to the base rate since March 2020 when the rate was reduced to the all-time historic low of 0.1%. The most recent reduction took the base rate from a sixteen year high of 5.25% to 5.0%. 

Despite the 5.0% base rate, lenders have lowered their rates further as if another MPC rate cut has already occurred. Mortgage rates have been noted as being at 4.0% or lower, while remortgages are just as attractive. This means that borrowers are being offered rates that are basically a gift from lenders. No one would have expected the offers would to be cut so much and so quickly.

It should be noted that lenders could just as easily step away from the competitive environment and begin to pull their best deals. Currently though, the deals are available, and borrowers could find substantial savings if they are in need of a mortgage or remortgage.

There could be borrowers unaware of the lower rates and simply focusing on the Bank’s rate. Without shopping for a remortgage, they could be missing out on the current deals. Others might be holding out from choosing a remortgage hoping that with another MPC rate cut lenders will drop their interest rates even further. 

This strategy could be costly for homeowners already having come to the end of their mortgage term. If they waited to choose a remortgage, their lender has transitioned them to their standard variable rate (SVR) which is the situation experts encourage homeowners to avoid. A SVR could have the homeowner paying more money than necessary as a remortgage could offer a much lower interest rate. There is a reason experts encourage homeowners to avoid a SVR because it might be double or more the rate level that could be found with a remortgage.

Also, moving onto a SVR awaiting another MPC cut could have the homeowner waiting much longer than expected. The first cut to the rate happened during the August MPC meeting. It had been forecasted for early spring. The MPC voted to hold the rate steady in September making the next opportunity for a rate cut in November since there is not a MPC meeting scheduled for October. The committee could vote to hold the rate steady once again and perhaps into 2025. 

There is little reason to wait for another MPC rate cut. Lenders have lowered their offers below the current base rate and even below what could be expected with a second vote to reduce the rate by another 0.25% as was voted for in August.

Homeowners could quickly determine what deals are available by shopping for a remortgage online. Visiting the website of a remortgage broker could quickly provide numerous quotes from a variety of lenders. Brokers could also have exclusive deals not offered directly from lenders to borrowers. Remortgage quotes could also be gathered by going from website to website of lenders. Once quotes are available it is extremely easy to review and compare the offers.

Another possible opportunity a homeowner could miss is due to overlooking the best remortgage deal by focusing simply on the lowest interest rate. The lowest interest rate often has costly fees. Overall, the savings of a lower interest rate balanced against the fees of the deal could have the homeowner not actually getting the best savings deal. Instead, by considering deals above the lowest interest rate with lower fees involved, the savings could be much greater.

Homeowners have unique borrowing opportunities currently, and if securing a low interest rate below the base rate and locking it in with a fixed rate choice sounds appealing then homeowners should shop online sooner rather than later for a new deal. If moving away from a risky SVR is desired, then there is no need to wait, the hoped for lower rate offers are available now. Also, shopping through many quotes as would be available by visiting the website of a remortgage broker, a homeowner could review and compare deals and find the best overall savings that fits their unique needs and avoid missing out on the unique remortgage borrowing deals available now.