There are many reasons homeowners should be considering a remortgage. One of course is to save money. Another is to secure a fixed rate and escape future rate hikes. Some homeowners could be considering an equity cash release while others could be considering a new deal to get peace of mind from higher rates or secure a deal before house prices possibly decline. Now that the Bank of England’s Monetary Policy Committee (MPC) has increased the standard base interest rate for the thirteenth consecutive time, remortgaging should be a consideration for all homeowners.

On Thursday, the Bank of England’s Monetary Policy Committee (MPC) met, and the result was the thirteenth consecutive meeting in which a rate increase occurred. It was not only another increase, but a larger one than what some experts had forecasted. The rate was moved by a 0.5% increase to 5.0%. Much of the reasoning behind the larger than expected rate increase is due to there not being a meeting in July in which the MPC could react to inflation. It has remained stubbornly high and despite the recent rate hikes, inflation remained steady from April to May.

In a less than favorable report, this morning, the Office of National Statistics (ONS) released the data on inflation. The Consumer Prices Index (CPI) had been expected to drop to at least 8.4%, but it remained at 8.7% for May, the same as was reported in April. While inflation has dropped from the peak level of 11.1% reported in October 2022, it remains over four times the target rate of 2.0% set by the Bank of England. The higher than expected inflation level adds more pressure to the Monetary Policy Committee (MPC) as they seek to balance the threat of inflation and the financial woes of households facing higher mortgage payments.

While there has been much made of lenders quickly increasing their offering interest rates prior to this week’s meeting of the Bank of England’s Monetary Policy Committee (MPC), it doesn’t mean there are not attractive deals still to discover and savings to be had. Two-year UK mortgages have been put on the lending market above 6.0%. In yet another indication of what is in store for homeowners, the UK two-year gilts passed 5.0% ahead of the MPC meeting, which could mean remortgage rates would rise even further.

If the experts are right, the interest rates available now will soon disappear and will not be seen again this year and possibly into next year. This is perhaps the last weekend to create a strategy to find financial relief before it is too late. Lenders could begin to pull their current rates and prepare for the change that might occur on 22 June. The Bank of England’s Monetary Policy Committee (MPC) will meet and possibly increase the base rate for the thirteenth consecutive meeting since December 2021. Borrowing is going to be more expensive and while home buyers can prepare for affordability issues and avoid a purchase for now if necessary, homeowners could be caught unaware and face financial woes.

Borrowers are again being warned, and this time more loudly, that change is coming in the lending market. Not only are lenders raising rates, even before the Bank of England’s Monetary Policy Committee (MPC) meets on the 22 June, but also pulling products making for a less competitive market for borrowers. Homeowners and home buyers will find they have fewer choices, and that interest rates of only a few weeks ago are gone. In some cases, lenders have chosen to pause any new applications in response to the higher risk of lending due to the current economic climate.