In March, in response to the coronavirus pandemic and its impact on consumers and the economy, the Bank of England’s Monetary Policy Committee (MPC) met twice to specifically address the cost of borrowing. The result was the all-time historic low level of the Bank’s standard base rate to 0.1%. This marked an over 300 year low. No doubt, there was going to be deals offered by lenders that would allow substantial savings in remortgaging.

The pandemic has not diluted the dream of being a homeowner. If anything, it has pushed for the dream to be stronger as people are forced to be at home more. According to a recent study by the Royal Institute of Chartered Surveyors (RICS), due to lower interest rates and stamp duty cuts the demand for property is growing and homes with gardens are in strong demand. In fact, the desire to purchase a home has pushed confidence in the housing market to a four year high.

Homeowners could have an opportunity to save money and put more cash flow into their monthly budget. There are many low interest rate deals that are attractive and for some could offer a substantial savings. It has been stated by experts that homeowners should review their current mortgage deal and if it is ready to end to start shopping around soon for the best deal. Those that have already had their deal end are especially encouraged to seek out a remortgage, as their lender’s risky standard variable rate (SVR) could have them paying more money than they would have to with a remortgage.

Remortgages are primarily sought out for the ability to save money. With a lower interest rate, a homeowner might in some instances save a substantial amount of money, which could be possible with the current historic low rates being offered by lenders. Other times, a remortgage is secured to keep from having to pay more than necessary by securing a fixed interest rate to protect against rising rates. It can also put cash into a homeowner’s hand with an equity cash release remortgage. During the pandemic, it appears a remortgage is also offering peace of mind.

For those that seek to save money with a lower interest rate through remortgaging, the discovery that one simply has to convert to their lender’s standard variable rate (SVR) and sit out paying more than necessary is hard news to take. Yet, that could happen to many homeowners should the house prices decline as is expected by one think-tank group, the Resolution Foundation, in response to predictions made by the Office for Budget Responsibility (OBR). The ability to remortgage could disappear for many homeowners with the onset of negative equity.

Home buyers have been busy taking advantage of the low interest rates being offered with mortgages. However, at the same time, homeowners are missing out. The latest data from the Bank of England revealed that purchase approvals were unexpectedly more robust during the pandemic. Homeowners on the other hand, with savings to be found, bypassed the ability to remortgage as expected.