There could be another cut to the standard base interest rate by the Bank of England’s Monetary Policy Committee (MPC) in November according to economists. The reason for the optimism is not that inflation will drop to the target rate set by the Bank of 2.0% because it is expected to remain slightly above target into the early part of next year. The expectation of a rate cut is due to the slowing of wage growth. The forecast is for another majority vote of the MPC to cut the base rate by 0.25% next month, which will take the rate from 5.0% to 4.75%.

Voting for another rate cut in November, which will amount to two in 2024, would be a significant sign that the economy is on the right track. The first cut of the year which was voted for in the August MPC meeting took the base rate from a sixteen-year high of 5.25% to 5.0% with a 0.25% reduction. It was the first cut to the base rate since March 2020. 

The MPC voted to keep the rate steady during the September meeting and there is not one scheduled for October. This makes November and December the final meetings of the year. Closing out the year with a base rate of 4.75% would be a welcomed decision by the MPC. However, there are still borrowers who remember that it was only three years ago, in December 2021 when the base rate was at an all-time historic low of almost zero at 0.1%.

At that time, the global pandemic had greatly impacted the economy and the MPC lowered the base rate to 0.1% in March 2020. Expectations grew of a rate hike for 2022 and an end to the historic low base rate, but the MPC surprised with an early cut in December 2021. The committee voted continuously at each meeting from December 2021 until August 2023 for rate hikes, taking it to the sixteen year high of 5.25%. It remained at that level until August 2024.

The consistent increases to the base rate, which lenders reflected in their own offerings, created financial strains on borrowers also dealing with inflation after the difficulty of the pandemic.

Homeowners coming to the end of their mortgage terms when the base rate was higher after perhaps having secured a short-term fixed rate during the historic low offerings would face paying an interest rate substantially higher than what they were used to paying and thus pushing many into affordability fears.

Many fell into arrears, others became prisoners to their mortgages and were out of reach of a remortgage due to declining into negative equity as the housing market slowed and property values declined.

Now, with expectations of a lower base rate, inflation under control, and the housing market showing growth which quiets fears of negative equity, homeowners are finally getting more comfortable to exhale and set up a smart strategy for the coming months ahead.

Of course, experts are still encouraging homeowners to shop for a remortgage online. It is fast and simple to do and allows the homeowner to gather remortgage quotes to review and compare them to discover what savings and peace of mind could be had with a remortgage.

Visiting a remortgage broker online could offer not only an exclusive deal from a lender that is not offering the same deal directly to borrowers, but also many quotes from a variety of lenders. Homeowners could also go from website to website of the lenders they choose to gather quotes.

The strategy behind remortgage shopping is to determine the best deal available, which requires pushing aside loyalty to the homeowner’s current lender in favor of a better deal.

All homeowners, no matter where they are in their current mortgage term, could benefit from shopping for a remortgage online. 

Those that have already had their mortgage term end and allowed their lender to move them to their standard variable rate (SVR) are likely paying more than necessary. One reason for some to have pushed aside the opportunity to remortgage and take on a SVR is to wait for lower rates.

There is little reason to wait out for the next MPC rate cut as lenders have entered into a competitive mode with one another for the attention of borrowers and there are available remortgage deals on the market already below the current base rate and below the expected one with the second vote by the MPC.

Homeowners nearing the end of their mortgage term could plan ahead whether their expiration date for the term is weeks away or months. Most homeowners could remortgage up to six months prior to the end of their term without a fee for terminating their current deal early.

Even homeowners with some time left to their term could benefit from remortgage shopping. Knowing what today’s interest rate offers are allows them to plan ahead. Whether that is saving for the expected costs to come for they might be moving from a pandemic influenced interest rate to a higher one, or they could consider taking on a fee to end their term early and take advantage of the current rates that are truly attractive to those looking to save money.

Another rate cut by the MPC is a good sign of the many rate increases having done the job intended and the economy is healing, but borrowers have a unique opportunity to save now without having to wait for the next vote for a rate cut. Simply shopping the competitive offers that are not only unexpectedly low but might not be around for long is the first step to a smart strategy plan toward starting the new year out with greater financial optimism.