Homeowners are being warned that if they want to avoid higher interest rates they should be considering a remortgage sooner rather than later.  Interest rates are due to increase despite the actions of the Bank of England’s Monetary Policy Committee (MPC).  The MPC is expected to leave the standard base interest rate unchanged but homeowners are likely to see interest rates on remortgages increase anyway.

Lenders are facing higher costs in lending.  This is prompting them to increase their standard variable rates (SVR).  Homeowners that have had their current mortgage deal end are converted to the lender’s SVR if they do not remortgage.  This has been acceptable even though there is great risk of an increase from lenders because most have had cheap and steady interest rates with their SVR.  That is changing and homeowners are going to be seeing increases.  Only a remortgage can help homeowners on their lender’s SVR avoid the expected increases.

Not only are lenders raising their SVR levels but they are sharing the increased cost of lending with borrowers by increasing the interest rates on remortgage and mortgage offerings.  That means that the cheaper remortgage deals have been pulled and replaced with higher interest rates.  This is likely to occur many times over as lenders level out their offerings across the market meaning the cheapest remortgage deals will be disappearing. 

Warnings have started to be voiced that if inflation levels keep rising the MPC may change their stance and increase the standard base interest rate.  Borrowing is getting more expensive and is likely to continue.  Even a slight increase in the cost of borrowing will be felt by homeowners.  Experts suggest that if homeowners could benefit from a remortgage they are encouraged to seriously consider a remortgage deal soon.