In the last few days, the news concerning the grim forecasts for winter and the cost of heating have piled on one after another. Headlines sharing information as to nearly 25% of UK households are intending to not turn on their heat this winter to save money. Another headline spoke of possible homelessness due to the cost of heating and the inability for households to afford not only food, and heating, but even fuel for transportation to work. Due to the many factors impacting the economy and household budgets, experts are once again encouraging strongly for homeowners to shop for a remortgage for possible assistance.

Rising interest rates could put a major strain on a household budget that is already dealing with current stressors from inflation such as higher food costs and energy costs. Many homeowners have had their current mortgage term end and have not remortgaged. Without a remortgage, they are moved to their lender’s standard variable rate (SVR). The SVR will continue to rise with every rate hike from the Bank of England’s Monetary Policy Committee (MPC) made to combat inflation. The standard base interest rate has been increased at each of the last six consecutive MPC meetings. 

The once historically low rate of 0.1% was first raised last December, and as of the August meeting is now at 1.75%. The August increase of 0.50% was the highest rate hike in 27 years. The next MPC meeting in September is expected to result in an increase with a minimum of another 0.5%. Since there is not a scheduled meeting in October, the increase is likely to reflect an aggressive move to attack inflation that will last until the next meeting in November.

Not remortgaging and being moved to a SVR not only leaves surprising rate increases, but the rate could be much more than that found with a remortgage. Also, with a remortgage a fixed rate choice would lock in the rate choice and help the homeowner escape higher interest rates of which there are likely many more to come.

Savings are a real possibility, not only on simply the lower rate that could be found versus paying on a SVR, but savings realized rather than paying more than necessary with each rate increase that is issued by the MPC until inflation comes under control which could be late in next year.

Homeowners are not only choosing fixed rate remortgages to secure their rate and escape rate hikes, but there are some that are taking advantage of cashing out their built-up equity. An equity cash release remortgage puts money in hand. Yes, another possible benefit of remortgaging besides saving money, locking in a fixed rate, and choosing a longer term to lock in the rate for years to come, is putting cash in hand to be used as the homeowner desires.

Paying for a holiday, consolidating debt, and upgrading and making improvements to the property are some of the choices that could be made. The money could even be used to make a home more energy efficient to save money during winter and the hotter summers that seem to be more of a normal occurrence. Season after season it could cut down expenses and keep the family protected and comfortable in their home.

There are warnings of tightened lending ahead. There could also be more lenders that pull out of the mortgage market. Fewer lending choices could be what is ahead for home buyers and homeowners. However, currently the lending market is doing their best to be competitive and offer attractive deals, especially in remortgage lending.

Again, the advice of experts is to shop for a remortgage. There is no commitment when one shops and seeks out possible remortgage deals. It can be done fast and easy online. Simply visit a remortgage lender, answer a few questions, and a quote could be in hand to review. Going from one lender website to another would put many quotes in hand to compare. Another strategy is even simpler. Visiting a remortgage broker could put numerous quotes in hand from a variety of lenders and possibly even an exclusive deal from a lender not offered directly to customers in one website visit.

Homeowners that have already had their mortgage term end are certainly encouraged to shop for a remortgage. Those close to having their deal end should shop early. Even those not close to having their term end are shopping. Some homeowners are choosing to pay a penalty fee to end their deal early and take advantage of the remortgage offers available now rather than taking the risk in waiting.

While when to remortgage is a personal choice, as well as which remortgage and which lender to choose, it is widely suggested to all homeowners to at least shop for a remortgage deal. The information opens up possibilities and perhaps it could be the path to the information that brings answers to all the hard question being posed to UK households day after day as they prepare for hard times ahead.