Homeowners are encouraged to shop for a remortgage sooner rather than later. There are numerous factors coming into play with the economy that could cause problems for those that are on tight budgets. The good news is that despite the pressures mounting in the economy that could impact households, there is a substantial savings opportunity with a remortgage.

Homeowners have had access to low interest rates for years. Since the pandemic took hold in the UK those interest rates had been historically low. In December, in response to growing inflation, the Bank of England’s Monetary Policy Committee (MPC) increased the standard base interest rate for the first time in almost three years. Borrowers lost the opportunity to borrow at historic low rates as the MPC increased the rate from 0.1% to 0.25%.

The next meeting of the MPC was held the beginning of February. Another increase occurred, doubling the rate from 0.25% to 0.50%.

This is not the last interest rate hike expected. Inflation will likely reach another high not seen in decades in spring despite the already two interest rate hikes to slow it down. How high the inflation rate is reported will determine what steps will be needed to further curb the climb, which will involve more interest rate hikes.

Since the interest rate is what determines the cost of borrowing, should the rate increase for a homeowner, they will be paying more in their repayments and overall for their loan. No one wants to pay more than necessary and a remortgage could help.

By choosing a remortgage, a homeowner could secure a lower interest rate. This is very likely the case for those homeowners that have had their mortgage deal end and were moved to their lender’s standard variable rate (SVR). Reports have shown some SVRs are double or more the interest rate that is available with many remortgages. 

Also, by choosing a fixed interest rate, homeowners could lock in a lower interest rate to save money now as well as against rising rates. 

By shopping online, homeowners could quickly and easily have quotes with possible savings to review. Discovering what deals are available and the best remortgage could only require a few minutes online. 

Homeowners could also do one stop shopping by obtaining quotes from a remortgage broker. It should be noted that not only do remortgage brokers work with many lenders making it easier than going from lender to lender to lender, they often have exclusive remortgage offers not available from lenders directly to borrowers.

Higher inflation, higher energy costs, and higher interest rates will be putting a strain on household budgets. Rather than allow one’s mortgage costs to increase as interest rates rise, seeking a remortgage could be helpful. It could offer savings immediately and offer a safety net against any increases that occur during the term of the deal. 

Since remortgage shopping online is simple and requires little time, discovering what savings are available should definitely be a priority before the current remortgage opportunities disappear with further interest rate hikes by the MPC. The next MPC meeting is scheduled for 17 March.