Homeowners that have had their mortgage term end and did not remortgage will have been moved to their lender’s standard variable rate (SVR). Because the Bank of England’s Monetary Policy Committee (MPC) recently cut the standard base interest rate to the lowest ever in history of the Bank to 0.1%, those homeowners are likely feeling that they are fine to rest where they are and stick with the SVR. Those that do should be aware that just as easy as the rate decreased, it will increase and they could be missing out on real peace of mind by not considering a remortgage.

Not only have lenders dropped the interest rate on their SVR, but their remortgage and mortgage deals on the market reflect the cheaper costs in borrowing due to the MPC rate cut. Therefore, remortgages offered by lenders and brokers have low interest rates to consider, and other benefits as well that will not be possible by sticking to the lender’s SVR.

First and foremost, there is the opportunity with a remortgage to lock in the low interest rate discovered for years to come. With a fixed rate remortgage, the interest rate is guaranteed for the length of the deal’s term. Homeowners should look back at the interest rate they were paying before they were moved to their lender’s SVR and compare that to the offerings available now. If there are savings to be had, then a remortgage might be the right choice. 

The current low interest rate level of SVRs will not last, but a fixed rate remortgage’s low interest rate is there for years to come. A fixed rate is much more trustworthy than the risky SVR which can fluctuate quite quickly and become a shock at times to a homeowner’s budget.

With a remortgage, there is also the ability to turn equity into cash. The current economic condition is putting a strain on many financial situations. Cash in hand to cover expenses, to keep bills under control, or to put aside for an emergency could be helpful to many homeowners. An equity cash release remortgage not only offers the ability to have cash money in hand, but also a low interest rate to rely on in the months and years to come.

While a SVR might be an easy choice, taking action to get a remortgage now while rates from lenders are low and offered in fixed rates, and some in equity cash release, might offer greater savings in the long run and certainly peace of mind in times where that is a rarity.