The questions on most homeowner’s minds is whether now is the time to remortgage, whether there is time to wait and some may be asking if they have waited too long already?  The lending market is changing and while there have been historically low interest rates since 2009 the lending environment is changing.  The Bank of England’s Monetary Policy Committee will be watched closely each and every month from now on for signs as to the standard base interest rate possibly being notched upward.  Economists are now talking in terms of “when” rather than “if” and are talking about “sooner” rather than “later”.

Lenders are already starting to nudge their fixed rate remortgages upward in preparation for handling demand that is expected and in response to the longer processing times in completing remortgages due to the Mortgage Market Review (MMR).  The MMR is indeed something that homeowners should take into consideration as they will encounter the new guidelines put into place meant to keep borrowing responsible.  More intimate details into the spending and saving habits of the borrower will be required to insure they can afford a remortgage (or mortgage) and can afford the loan when interest rates increase.  Getting a remortgage can take longer now than before and that time constraint should be taken into consideration by homeowners when they choose to seek out a new deal.  Rates creeping upward can gain momentum as the homeowner is in the process of gathering the information required by lenders. 

Homeowners should also be taking into consideration whether they can afford to sit on their lender’s risky standard variable rate (SVR).  If their budget can handle the quick and unexpected increase of their interest rate then perhaps sitting on a low SVR is possible until the remortgage deals increase toward an uncomfortable budget level.  Keeping in mind that as rates increase the remortgage deals available currently will disappear and in exchange for keeping on a low SVR there could be loss of an opportunity to fix at a low rate for a longer period of time than that of the SVR staying low.

Those stuck in their current mortgage deal may want to consider the cost of penalty fees for ending the deal early and gaining a fixed rate that could save them money.  Taking into consideration all fees associated with a remortgage as well as the potential savings of a low interest rate will allow the homeowner to discover if it is best to ride out the current mortgage deal or exit and gain a remortgage now.  Shopping around or using a remortgage broker could aid in discovering a lender seeking to draw in new customers with a switch that includes free valuations and free legal fees.  Those deals are available and can be found to help ease the cost of ending a mortgage deal early.

For those sitting on little to no equity there are lenders that are willing to consider a remortgage.  In these cases, if the remortgage deal is complicated then seeking out a remortgage broker that is familiar with which lenders are willing to deal with low equity remortgage situations could save time and wasted effort going through other lenders only to be denied.