Homeowners and home buyers will be either satisfied or not concerning the fact there is not a scheduled Bank of England Monetary Policy Committee (MPC) this month. The last meeting, held in March, resulted in the committee members voting to hold the standard base interest rate at 5.25%. It was the fifth consecutive MPC gathering that resulted in a vote to hold the rate steady. However, it was the first time in two years no member voted for a rate hike. The majority voted to hold the rate, but one voted to cut the rate. The base rate of March will remain till May, so there is no rate cut this month.

When the MPC will cut the base rate is hard to forecast. There had been expectations of an early cut to the rate in spring, now experts believe it will be in summer. A possible three rate cuts or two could occur by the end of the year. Likely the cuts will be marginal, such as 0.25% to keep inflation under control. There is no forecast of rates declining to resemble the rates brought about by the pandemic such as the rate in April 2022 of 0.75%.

In the last quarter of 2023, borrowers were warned it might be late in 2024 or even into 2025 before interest rates would move downward. Moving through 2024 without a rate hike would be possible, and rates would likely decline, but if they did, not by much. However, optimism grew and at the first of the year an early cut was expected. It has not happened and the rate remains, and it is causing hardship for borrowers.

Home buyers are finding it difficult to afford a home. Saving for a deposit has been estimated to take an average of ten years. Average house prices are still elevated from the pandemic lifestyle home buying boost and buyer’s budgets have been strained by years of high inflation. A cut in the base rate, signaling less risk for lenders, could bring about lower mortgage interest rate offers. More affordable rates would be helpful for all mortgage-based buyers.

Homeowners, especially those coming to the end of a fixed rate obtained in 2022, could have financial strains with new rates. While home buyers can walk away and hold out when affordability is an issue with higher borrowing costs, homeowners must face the current lending market as it is. The best option for homeowners according to experts is to shop for a remortgage. 

When a mortgage term ends, the homeowner has the option to remortgage. Waiting to the end of the term is not necessary, but ending a term early could require fees. Most homeowners remortgaging within six months of their term’s expiration do not have to pay a penalty fee to remortgage early. 

Without a remortgage, the homeowner’s loan will transition to the lender’s standard variable rate (SVR). Typically, a SVR is a higher rate than what could be found with a remortgage. It could be double or more the rate of a remortgage. Since the interest rate of a SVR is likely higher, a remortgage is preferred. Not only could remortgaging bring savings, but with a fixed rate choice it locks in the rate and offers peace of mind with set repayments.

Homeowners have been warned to shop early for a remortgage. Doing so offers time to plan for the change in the repayment amounts. As mentioned, it saves money by avoiding a SVR and with remortgaging there is choice. Choice in what type of loan, such as a fixed or tracker loan, or the length of term, or the rate allows the homeowner options and options are welcomed when finances could become a strain due to the higher cost of borrowing.

Homeowners can easily shop for a remortgage online. By visiting the website of a remortgage broker, in a matter of minutes homeowners could have numerous quotes from a variety of lenders. Brokers could also offer exclusive deals not offered directly from lenders to borrowers. Gathering quotes to review and compare is also possible by going from lender website to website. 

When the MPC cuts their rate is unknown, but getting a remortgage deal among the choice of many quotes could happen as soon as one visits a remortgage broker or lender website and doing so could offer financial peace of mind as well as savings.