Homeowners have surely heard the advice coming from many sources: remortgage while the opportunities are at their best and that means now. With rising interest rates, the cost on a property loan is becoming more expensive. Those homeowners that had their mortgage deal end, did not remortgage, and were moved to their lender’s standard variable rate (SVR) are especially encouraged to shop for a remortgage. However, so are those that are on a tracker deal, are close to having their mortgage term end, and even some homeowners that would be required to end their mortgage term early.

With the closure of a term before it expires, a homeowner could face penalty fees, but for some the fees could be worth it. This could be the case if they expected to be able to get a low interest rate remortgage with a fixed rate and a long term. In doing so, the homeowner would be setting a safety net in place to protect against expected hikes in interest rates in the near future. If a higher interest rate could be devastating to a household budget, then consideration of securing a fixed rate and longer term could be a smart strategy despite penalty fees.

Of course, any remortgage consideration should be deeply researched, expert information gathered, and careful review taken before making a decision on a remortgage.

The choice of which action to take, as to remortgage or not, is less complicated for those on their lender’s SVR. Research has shown that homeowners on a SVR could be attached to a much higher interest rate than what is available with a remortgage. Because a SVR could quickly adjust upward at the action of the MPC, the higher cost to the homeowner could cause financial insecurity while adding pressure to quickly remortgage. 

It should be taken into consideration that a homeowner could face higher costs, have pressure to rush to a remortgage to be able to afford their repayments, while also facing higher interest rate remortgages if they wait. Waiting could have them also facing a tighter lending environment than what exists currently.

Pay more when savings are available would not be the advice of experts. Instead, experts are encouraging all homeowners to shop for a remortgage. Doing so online is fast and easy and puts quotes in hand in minutes to consider without any obligation. Shopping online with remortgage brokers could be even quicker due to their offering quotes from many lenders at one time. There could even be exclusive deals from lenders through brokers making it worth the visit to a remortgage broker website.

Homeowners close to having their current mortgage term end are certainly in a good position to shop for a remortgage now. If they choose to bypass the opportunity to remortgage they will be moved to their lender’s SVR and as discussed earlier that could be a risky position to be in with forecasted interest rate hikes ahead.

The next Bank of England Monetary Policy Committee (MPC) meeting is 17 March. The expectation is for yet another rate hike possibly to 0.75% from the current 0.50%. Considering it is not the only rate hike expected this year, and that in December the Bank’s rate was almost zero at 0.1% the choice to remortgage or not while rates are lower than they could be in just a few weeks could be perfectly clear. Remortgage sooner rather than later. At the very least shopping online will offer information as to what savings are available to better make a decision.