Interest rates are on the rise due to increases in inflation. The target level for inflation set by the Bank of England is 2.0%. It currently is at 5.4% which is putting the squeeze on household budgets. This level of inflation has not been seen in decades. The expectation is for inflation to possibly rise to 7.0% in spring. In an effort to control the quickly rising inflation, the Bank of England’s Monetary Policy Committee (MPC) has increased the standard base interest rate.

During the start of the pandemic, the Bank’s rate had lowered to an historic level of almost zero at 0.1%. Because of inflation, at the start of December last year, the MPC surprised with an earlier than expected rate increase to more than double at 0.25%. It was soon followed by another rate increase at the next MPC meeting in February to 0.50%.

The next meeting on 17 March might produce another rate hike. It could be at 0.75% and still not the last of the expected increases for the year.

Inflation has come at a most inconvenient time as during the winter it has left households spending more on energy costs. There are also the higher costs of food, automobile fuel, and more. There is also the continued impact of the pandemic. 

With so many factors putting a strain on household budgets, remortgaging could offer relief and an answer to rising costs for homeowners.

Remortgaging offers the opportunity to secure a lower interest rate. Since the interest rate is what determines the cost of borrowing, it could prove strategically smart to seek a lower rate. Choosing a fixed rate remortgage locks in the lower rate for the length of the deal’s term. This could offer savings at first and then throughout as expected interest rate increases occur.

The next interest rate increase could happen during the next MPC meeting on 17 March,

Rather than lose out on the interest rates offered currently, homeowners are encouraged to shop for a remortgage and discover the possible deals available. Shopping online is quick and easy and offers homeowners quotes in hand for review. Quick comparisons could be had by shopping online with a remortgage broker. They work with many lenders and often have exclusive deals.

Interest rates are due to increase many times this year as inflation is not due to start declining till next year. Homeowners could find relief for their households through remortgaging and due to how simple it is to shop online, doing so could offer information as well as opportunity to escape the pressure on one’s household budget currently occurring by a pandemic and inflation impacted economy.