There has been much in the news concerning homeowners and the importance of remortgaging. There are many reasons for this, the most obvious being higher interest rates. Years ago, a rate of 4.5% would have been considered normal and affordable, but it is less the case when homeowners coming to the end of their mortgage term are leaving behind historically low interest rates and having to face the rates offered currently.

There has been great concern for homeowners as of late. They are facing higher interest rates making borrowing more expensive, which will occur for thousands coming to the end of their fixed mortgage terms this year. Those homeowners that obtained their rate when lenders were offering historically low interest rates will at the end of their term face rates higher than in over a decade.

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.