There are strong warnings that interest rates will be rising in the coming year. Within two years, forecasts call for the Bank of England’s standard base interest rate to be in double digits. To build a safety net against rising rates and paying more than necessary, homeowners are seeking remortgages. With a fixed rate remortgage on a long term, a homeowner could lock in a low interest rate of today against expected rising rates.

The housing market continued to flourish in the month of October, despite the end of the stamp duty holiday that concluded the last day of September. Nationwide has reported the average house price has increased by more than £30,000 since the Covid pandemic crisis began and that the average house price has risen above £250,000 for the first time in Nationwide’s index reporting. The October data revealed an increase of 0.7% in October from the previous month. 

The holidays are only weeks away and the rush and hustle that is always a part of the busy season as we gather with family and friends and celebrate. Due to the Covid-19 vaccine rolling out and allowing this holiday season to be more normal than last, it is sure to put many more things to do on one’s check off list. However, at the top of the list, homeowners might want to make room for shopping and obtaining a remortgage. Doing so could offer peace of mind, a financial safety net, and perhaps a bit more cash in hand to have a very memorable holiday season.

In October £29 billion worth of fixed term mortgages came to end. Those homeowners were left with an opportunity to remortgage and likely save a substantial amount of money due to the historically low interest rates being offered by lenders. The homeowners that did not choose to remortgage were moved to their lender’s standard variable rate (SVR) and in comparison to the interest rate they were probably paying on the deal that ended, they are saving money, too. Just not as much of a savings, nor is there much security that the savings will last for long.

Homeowners have been given a forecast that should have them putting remortgaging on the top their priority list. According to data from the Office for Budget Responsibility (OBR), mortgage interest payments are set to rise to the highest level since at least 2008 within the next two years. The OBR report suggested that interest rate payments could increase by 13% in 2023 which would be a drastic hit on household budgets that are now enjoying historically low interest rate levels.

The UK housing market is not expected to slow down anytime soon as the demand from hopeful home buyers is still strong. Despite the pandemic closing in on ending with the vaccine rollout, the desire for a pandemic lifestyle home remains. Buyers, whether first time buyers or home movers, are shopping for space. More space inside for privately working at home, studying, entertaining, and getting fit as well as more space outdoors.