Borrowing has become more expensive in a relatively short period. In December 2021, the Bank of England’s Monetary Policy Committee (MPC) began the first of what would become twelve consecutive rate hikes. The Bank’s standard base rate then was almost zero at 0.1% and today the base rate is 4.5%, which is the highest level since 2008. Unfortunately, it is not likely to stay at this level much longer as the next MPC meeting is set for 22 June and experts believe another increase is likely.

Deciding to remortgage could have both advantages as well as disadvantages. Many experts are encouraging homeowners to consider a remortgage and to shop for one online to determine what opportunities are available. It is easy to shop online for a remortgage and get quotes to discover what savings or benefits are available. Once the homeowner reviews quotes, it is then easy to develop a strategy and determine if it is the right time to remortgage or not.

The next meeting of the Bank of England’s Monetary Policy Committee (MPC) will be held on 22 June 2023. The forecast is for yet another rate hike as inflation has remained stubbornly high despite the previous twelve consecutive rate increases so far. During the May meeting, the base rate was increased from 4.25% to 4.5%. The 0.25% increase was the slow and steady choice made during many of the past hikes to the standard base rate. However, since inflation remained far above the target rate of 2.0% at 8.7% down from the 10.1% reported in March, there could be a 0.50% hike at this month’s MPC meeting.

Unfortunately, in a matter of a week, things have changed drastically for homeowners that were playing the waiting game on whether or not to remortgage. Those that took action rather than risk higher rates likely obtained an interest rate that has already disappeared. Due to the less than expected adjustment to the inflation rate, lenders last week began to pull their best mortgage and remortgage offers and are replacing them with higher rates. Some products are at rates almost a full percentage point than offered the prior week. Borrowing has once again become more expensive.

The need for a remortgage has been repeated by experts for over a year now. Those that waited out the warning are paying more money than if they had listened to the advice earlier. The reason is that borrowing is much more expensive than it was only a little over a year ago. Those with debt subject to rising interest rates are having difficulty adjusting their household budgets and while there are those hoping for the rates to bottom out again to make affordable rates more accessible, it is not likely to happen. If anything, the current rates will be disappearing soon, and higher ones are in our near future.

It was only a few weeks ago that there were unexpected favorable factors in the lending market for homeowners. Despite the Bank of England’s Monetary Policy Committee (MPC) hiking the standard base rate to 4.5%, many lenders held back from pulling their lowest interest rate deals and pushing offering rates higher. It was a competitive move by lenders to draw the attention of borrowers, but that opportunity may have passed.