Households are facing financial strains from many areas. Fuel and energy costs are causing issues and inflation is taking extra out of pockets on more and more goods. Borrowing is more expensive as well with the Bank of England’s Monetary Policy Committee (MPC) increasing the standard base interest rate upward during each of the last three consecutive meetings. Due to the tightening on consumers, the risk in lending is also higher and this could be setting in place a tighter lending environment for borrowers making it not only more expensive but harder to come by.

Home buyers seeking a mortgage and homeowners shopping for remortgages could soon be facing new models in lending when applying for loans. For many years borrowers have been able to borrow in a market that was competitive. Lenders were optimistic about the ability of borrowers to pay back their debt due to lower interest rates and inflation that was able to be easily corrected when it veered from the 2.0% target set by the Bank.

Soon inflation could enter a level not seen in decades as it is expected the report in May during the next MPC meeting could result in an inflation rate nearing 8.0%. As long as inflation is in a state of growth and far outside the target, the MPC will have little choice but to raise the Bank’s standard base rate. Even slight rate increases could cause financial difficulty on households already strained from other areas such as the prior mentioned fuel and energy costs and inflation pushing up the cost of consumer goods.

Experts are issuing warnings that borrowing could become more constrained. While it is not a good strategy to borrow when a person feels the debt is burdensome, for optimistic and determined home buyers and homeowners, borrowing now rather than later could make the most sense. It is likely that borrowing could become more expensive in just weeks when the next MPC meeting occurs on 5 May, so loans obtained now could be much less expensive.

For homeowners seeking a remortgage, a fixed interest rate could offer a safety net against rising rates throughout the term of their deal. For home buyers, a fixed rate mortgage could also be a smart strategy as it will also be locking in the rate and helping them to avoid paying higher rates. This is why lenders are reporting fixed rate deals are currently the most popular choice.

Demand is high for mortgages and remortgages and with a constrained lending market ahead, it could help a home buyer or homeowner to get their deal with less of a rush and stressful process if they start shopping now for their best deal.

Luckily experts are available for advice and there are many resources online to help such as getting quick quotes from lenders and brokers. Once discovering what is possible, it could be advantageous to take action sooner rather than later to make the most of the lending opportunities available now.