The number of remortgages reported by several different sources increased in January with the threat of a possible increase in the standard interest rate. Homeowners rushed to secure a low rate in a remortgage before the regulators took action. The Bank of England’s Monetary Policy Committee (MPC) has left the rate unchanged for two years and there would be no reason to expect a change now over any other time, except for a few issues.

Comparing the figures of the economy the data that pushed the rush to secure a remortgage because a possible rate increase seemed to be looming was that inflation was increasing and that the economy in December had contracted. When this news came out in January the numbers increased in remortgages. However, there had already been an increase trend due to the monthly climb of inflation.

The demand for remortgages will no doubt continue to be high with more economic news that inflation is still going upward. In addition, the urgency has been increased due to lenders pulling fixed rate deals from the lending market. The deals seen a few weeks ago are no longer available as demand grew. The rates given by lenders to borrowers have also increased as swap rates have risen for them. While the base rate has remained unchanged, those remortgaging or hoping to remortgage are watching the signs that point to a change soon.

Economists have forecasted a possible increase in the rate around May, but the unrest in both Egypt and Libya have pushed oil prices upward which could impact inflation to the point that the regulators will be forced to move earlier. The minutes from the February MPC meeting are due out today and with that the tone of the meeting will be more clearly viewed and economists will no doubt revise their opinions with both inflation and that in mind. Meanwhile, homeowners seeking a remortgage will be pleased to find that though offers are not as good as they were weeks ago, there still are historically good rates being offered by many lenders.