Homeowners are showing strong demand for remortgaging. Many are seeking financial relief from both current and future economic hardships due to inflation, the war in Ukraine, and the pandemic. The high rate of inflation has caused the Bank of England’s Monetary Policy Committee (MPC) to increase the standard base interest rate during the last four consecutive meetings. The rate has increased ten-fold from 0.1% to 1.0%.

Inflation has been a main topic in the news since the end of last year. Now with the calendar narrowing in on the half-year marker of 2022, it would seem it should be less and less of a concern, but it is not. Inflation is on the path to 10% which means it will be five times the target rate of 2.0% set by the Bank of England. Warnings have come from the Bank’s Governor Andrew Bailey that there are very real hardships in store in the months ahead.

The Bank of England has increased the standard base interest rate from 0.1% to 1.0% during its last four consecutive meetings. This is a ten-fold increase in less than six months. In simple terms, borrowing is now ten times more expensive than it was this time last year. Considering that inflation is taking more money from household budgets with fuel, energy, food, and other goods costing more, higher interest rates are another financial burden. 

Once home buyers become homeowners they tend to not pay that much attention to house prices. They have their home so why should house prices concern them. Actually house prices should concern homeowners because they do still have a connection to their current situation and by staying alert they can prepare when needed and take advantage of the situation as well.

Homeowners and home buyers will be facing stricter affordability reviews when seeking a remortgage or mortgage. Not only will the calculations include the higher costs of living, but also the now higher cost in borrowing. The Bank of England’s Monetary Policy Committee (MPC) last week increased the standard base interest rate to the highest level in 13 years. In December, the rate was at an historic low of 0.1% and by May it is now at 1.0%. This rapid increase comes as each of the last four consecutive MPC meetings resulted in a rate increase.

In an expected move during the Bank of England’s Monetary Policy Committee (MPC) meeting on Thursday, the standard base interest rate was increased to 1.0%. It is now higher than it has been in over a decade and has risen from nearly zero at 0.1% in December to ten times higher at 1.0% in less than six months. These quick increases are likely to add further financial hardship on many household budgets already impacted from the pandemic, inflation, interrupted supply chains, and higher energy and food costs.