After a standby month in which borrowers did not have to endure another rate hike, the wait is over. The 4 August, this Thursday, is the next Bank of England’s Monetary Policy Committee (MPC) meeting. The result of this meeting will determine not only the rate but the fate of millions of borrowers including homeowners. Those that are facing the nearing end of their current term will face different interest rate choices than before and it could determine their financial health and stability.

The Bank’s rate had bottomed to an all-time historic low of over 300 plus years during the pandemic lockdowns. The 0.1% set rate began its upward move in December of last year. While the rate increase was minimal in terms of what used to be norms, the hike took the rate from 0.1% to 0.25% which is more than double. When connected to large value loans, the increase can be substantial such is the case with property mortgages.

The MPC has voted for an interest rate increase in response to inflation at each of the last five consecutive meetings. This year all increases have been at 0.25%, but some members would have liked to have seen the rate increase by 0.50%. Many experts believe the higher rate increase could happen this month. If the rate does increase to 1.75% it will be a major change from the 0.1% this time last year.

Homeowners still have time to take fate into their own hands and find relief from the rising rates by remortgaging with a fixed rate deal. It is currently popular and so much so that some homeowners are choosing to pay penalty fees to end their current mortgage term early to remortgage. It offers them a choice from current interest rates rather than facing higher ones in the future.

Remortgaging could not only offer a safety net from higher rates, but also the opportunity to cash out built up equity. Higher home values are providing a homeowner with the chance to put cash into hand. The equity cash release remortgage is popular with homeowners seeking funds to upgrade and make improvements to the property such as making their home more energy efficient to allow further savings from higher energy costs. Of course, the homeowner has the option to use the funds for whatever they choose and there are as many different reasons to cash out equity as there are homeowners.

Experts are encouraging all homeowners to shop for a remortgage. Those that are close to having their mortgage term end, even those that still have time left, and especially the homeowners that have already had their term end and instead of remortgaging allowed their mortgage to be moved to their lender’s standard variable rate (SVR).

No one would intentionally pay more than necessary, and by shopping for a remortgage that situation could be avoided. A remortgage could have an interest rate much lower than an SVR. Also, it should be considered that the increases in a SVR could continue coming and impacting household budgets. Higher interest rates, higher energy costs, and inflation are all causing strains and by shopping for a remortgage a homeowner could find an escape. 

Remortgage shopping is quick and easy online. Visiting lender websites will put quotes in hand to review. There is also the option of visiting a remortgage broker site and getting quotes from a variety of lenders from one site in which to review and compare.

The MPC is deciding the rate on Thursday, and for some their financial fate as well, but by shopping online, homeowners could take back their fate and determine their own financial future.