Homeowners are seeking the opportunity to remortgage as a path to escaping higher interest rates. According to several reports, more homeowners with many months left in their current term are in search of remortgages. Rather than face the interest rates that will be available when their terms expire, they are instead choosing the opportunity to remortgage now and obtain an interest rate level that could be cheaper. 

Many homeowners are unaware of how a remortgage could benefit their household budget. Inflation is putting a hardship on consumers and to control the rising inflation rate, which is currently more than three times the level of the target set by the Bank of England, the Monetary Policy Committee (MPC) increases the standard base interest rate. Paying on loans with higher interest rates increases the cost of borrowing. For homeowners, due to the high amount of borrowing, paying a higher interest rate could be a hard hit to one’s budget.

Homeowners took notice of the warnings of rising interest rates at the end of last year and sought out remortgages. The high demand could have been kicked into high gear when the Bank of England’s Monetary Policy Committee (MPC) chose to hike the standard base interest rate during their December meeting. The expectation had been that the rate would be increased soon and perhaps in the first quarter of 2022. However, inflation grew at such a rate that the MPC took action sooner and the rate hike of December caused homeowners to become aware of the need to remortgage or face higher rates and pay more than necessary.

Some of the first reports on the state of the UK housing market have been released and as expected the demand for property remains high. Much of the strong demand is due to rising interest rates and the attempt of buyers to purchase now before borrowing becomes more expensive. According to Nationwide, the average house price grew in 12 months to March by 14.3% or £33,000. The rate of growth in March was the fastest since 2004.

In the wake of two interest rate increases by the Bank of England’s Monetary Policy Committee (MPC) in December and February, hopeful home buyers rushed to shop and buy. According to a recent report by Zoopla, the UK house price increased by 8.1% in the twelve months to February. In comparison to February 2021, there was a 4.2% increase. The increase is impressive, but was slightly lower than the increase in January which was 8.4%.

Homeowners are shopping for remortgages according to experts. No wonder due to the many benefits a remortgage could offer a household while the economy is dealing with an ongoing global pandemic, a war in Ukraine, inflation at levels not seen in four decades, and rising interest rates. According to the LMS Monthly Remortgage Snapshot remortgages increased in February by 51%,