The last few years have been difficult for homeowners. In the blink of an eye, the Bank of England’s standard base interest rate grew from 0.10% to 5.25%. This put homeowners facing much higher interest rates when their mortgage terms ended, and they shopped for a remortgage. While choosing a new deal from lenders would offer vastly different choices than before, a remortgage is still the path to savings as avoiding a standard variable rate (SVR) is the best option. Allowing a lender to move their loan if bypassing a remortgage could have the homeowner paying more than necessary on a SVR.

There are millions of homeowners in need of a remortgage this year because their mortgage terms expire. As their mortgages end as well as their current interest rate, homeowners will either choose a new deal or their lender will move them to their standard variable rate (SVR). Avoiding the SVR is a better choice as remortgaging normally offers the lowest interest rate. By remortgaging, a homeowner could discover an interest rate half of what is available in a SVR. However, finding the right remortgage requires a bit of work, yet much easier than expected.

As expected, and forecasted, the Bank of England’s Monetary Policy Committee (MPC) has voted to keep the current standard base interest rate steady at 5.25%. This is despite the fact that the day before, the latest data revealed for the first time in three years, inflation dropped to target rate of 2.0%. Reaching the target would be thought to trigger a rate cut as reaching the level set by the Bank is the goal of raising the base rate. However, there are issues that cannot be overlooked in the economy and the MPC is moving forward cautiously. 

Inflation has reached the target rate set by the Bank of England for the first time in almost three years and that has brought hope of lower interest rates. Inflation in May was reported at 2.3% and declined to 2.0%, which is the target rate. Tomorrow, the Bank’s Monetary Policy Committee (MPC) will be meeting to consider whether lowering the standard base interest rate is needed or it should hold steady. Raising the base rate to curb spending and bringing inflation to the target level of 2.0% has been the goal of the MPC, but it is not yet time to cut rate so say experts.

Next week is the June meeting of the Bank of England’s Monetary Policy Committee (MPC). It will be held a day after the data on the current state of inflation is shared. Last month inflation reached closer to the target rate of 2.0%, falling from 3.2% to 2.3%. However, as close it fell to target it was short of the forecast for 2.1%. Depending on the inflation report released on 19 June, the MPC will vote to either keep the current standard base rate steady or offer an earlier than expected surprise cut.

The scheduled meeting of the Bank of England’s Monetary Policy Committee (MPC) is next week. It is the meeting that had once been considered to result in a cut to the standard base interest rate. However, the forecasts leave little hope for that to happen. The current rate of 5.25% will likely be voted to stay in place by the majority of the members. Without a meeting scheduled for July, the next hope will be for one in August.