If the experts are right, the interest rates available now will soon disappear and will not be seen again this year and possibly into next year. This is perhaps the last weekend to create a strategy to find financial relief before it is too late. Lenders could begin to pull their current rates and prepare for the change that might occur on 22 June. The Bank of England’s Monetary Policy Committee (MPC) will meet and possibly increase the base rate for the thirteenth consecutive meeting since December 2021. Borrowing is going to be more expensive and while home buyers can prepare for affordability issues and avoid a purchase for now if necessary, homeowners could be caught unaware and face financial woes.

There are many homeowners that will come to the end of their mortgage term this year. For those that have been paying on a fixed rate, their current deal will end, and they will be forced to choose a higher rate than what they have been paying. So far, they have been shielded from the rate hikes. Affordability could become a problem, and rather than face paying more than necessary, a little preparation could save money and bring peace of mind.

The opportunity to secure a fixed rate deal and lock in their newly chosen rate could help homeowners save just as it likely did in the past. While there have been 12 rate hikes so far, and another possibly next week, there are more expected beyond the next MPC meeting.

Inflation has not responded as expected and remains stubbornly high. It was at 10.1% and remains close to double digits at 8.7% and far from the Bank’s target rate of 2.0%. This has caused experts to forecast a higher peak rate of 5.5%, rather than the previously forecasted peak of 4.8%. 

Currently the rate is 4.5% after a rate hike of 0.25% during the May MPC meeting. 

Homeowners coming to the end of their mortgage term this year could have chosen their current or recently expired rate when the Bank’s standard base rate was at a historic low of almost zero at 0.1%. The difference in lender rates offered then versus now change a repayment and the cost of borrowing by a great amount. 

When the homeowner’s term ends, they have the choice to either allow their lender to move them to their standard variable rate (SVR) or make the more favorable choice of remortgaging. Getting a remortgage allows the choice of a fixed rate, while the SVR is variable and subject to further rate hikes.  Also, fixed rates are usually attached to lower interest rates, sometimes half or even less than the offered SVR.

By choosing a remortgage, a homeowner can avoid the more costly SVR and lock in their chosen rate to save against any further rate hikes. There are other benefits with a remortgage. For instance, some homeowners are choosing a remortgage for the before mentioned opportunities to save, but also for the opportunity to turn built up equity into cash with an equity cash release remortgage. 

The ability to discover what a remortgage could do for a homeowner is possible by obtaining a remortgage quote. Visiting a remortgage broker website, a homeowner could obtain quotes from many remortgage lenders to compare and review. Brokers also could offer exclusive deals from lenders not offered directly from the lender to a borrower. Also, a homeowner could visit each remortgage lender website of their choice to gather quotes to compare.

Along with quotes to review, a homeowner needs to understand what their current rate is and what kind of loan it is, such as whether it is a fixed rate or variable or tracker and when it is due to expire. Many lenders allow remortgaging up to six months prior to the expiration of the term without any penalty fees. If the homeowner is outside of the six-month allowance, the fee might be nominal if it is close to ending and worth remortgaging now versus waiting and perhaps paying higher rates later.

While the rates found under two years ago are no longer available and the current offerings much more expensive in comparison, a remortgage could save money. With the ability to secure a low rate of today rather than face higher and higher rates as the MPC fights against inflation throughout the year, shopping for a remortgage could be a good pursuit this weekend. Doing so could make the most of the opportunity to save when more money left in the household budget is of great importance.