There is good news for homeowners considering a remortgage. There have been many new remortgage products put onto the lending market and some have lower interest rates than what was found just weeks before. This is important for the tens of thousands of homeowners that could benefit from securing a fixed rate deal to protect from further rate hikes expected from the Bank of England. Visiting the website of a remortgage broker could quickly offer quotes into a homeowner’s hand to review and compare, including not only newer remortgage offers but possibly exclusive deals lenders do not offer directly to borrowers.

Shopping for a remortgage will give a homeowner valuable information as to what current deals are available. For the many that are coming to the end of their mortgage term, the information allows them to prepare for the higher interest rate they will be facing at the end of their term. 

Despite the lower rates being offered currently with some deals, homeowners that secured their current mortgage when lenders were offering historic rates will not be able to find the same low rate at the end of their term. However, a remortgage could save them money versus allowing their lender to move them to their standard variable rate (SVR).

A SVR is usually higher than the remortgage rates offered. At the end of the homeowner’s term, they could choose to remortgage and if not, the lender will move them to their SVR which could have a rate double or more than could be found with a remortgage. Also, with a variable rate the homeowner would be subject to rate hikes by the Bank, while a remortgage offers the choice of a fixed rate which is locked in for the duration of the new term.

The new lower interest rate offers are a surprise to many, especially since the offerings are directly from the lender and not due to any action of the Bank’s Monetary Policy Committee (MPC). A recent report explained how little if any money is currently being made by lenders due to lowering their rates. Some are offering rates very close to the Bank’s standard base rate of 4.25%.

The rate rose to 4.25% during the March meeting of the MPC. It marked the eleventh consecutive meeting by the MPC to result in a rate hike. It is not likely the last increase due to inflation remaining more than five times the Bank’s inflation target rate of 2.0%. There was not a meeting this month, but there will be one in May. The current expectation for that meeting is at least an increase of 0.25% and that would put the base rate at 4.5%.

It should be noted that lenders have moved into a competitive mode to gain the attention of borrowers. Due to the higher interest rates that started to rise a little over a year ago, there are fewer home buyers to build their customer roster, but more homeowners seeking remortgages. If the rush to remortgage fills the lack of demand in lending, the current lower rates could disappear quickly. Another hike by the MPC in May could also cause the new remortgage offers to go away.

There is no denying that homeowners have been feeling the financial strain from the current economy so any relief with lower interest rates is welcomed. Inflation has been taking a toll for a while as have higher energy costs. Facing higher interest rates in mortgage repayments will not be easy, but to soften the blow, shopping for a remortgage could be the solution. Rather than lose a substantial amount of money by paying more than necessary, homeowners are encouraged to shop for a remortgage and do so sooner rather than later to take advantage of the attractive deals available now.