Many homeowners are unaware of how a remortgage could benefit their household budget. Inflation is putting a hardship on consumers and to control the rising inflation rate, which is currently more than three times the level of the target set by the Bank of England, the Monetary Policy Committee (MPC) increases the standard base interest rate. Paying on loans with higher interest rates increases the cost of borrowing. For homeowners, due to the high amount of borrowing, paying a higher interest rate could be a hard hit to one’s budget.

Homeowners took notice of the warnings of rising interest rates at the end of last year and sought out remortgages. The high demand could have been kicked into high gear when the Bank of England’s Monetary Policy Committee (MPC) chose to hike the standard base interest rate during their December meeting. The expectation had been that the rate would be increased soon and perhaps in the first quarter of 2022. However, inflation grew at such a rate that the MPC took action sooner and the rate hike of December caused homeowners to become aware of the need to remortgage or face higher rates and pay more than necessary.

Some of the first reports on the state of the UK housing market have been released and as expected the demand for property remains high. Much of the strong demand is due to rising interest rates and the attempt of buyers to purchase now before borrowing becomes more expensive. According to Nationwide, the average house price grew in 12 months to March by 14.3% or £33,000. The rate of growth in March was the fastest since 2004.

In the wake of two interest rate increases by the Bank of England’s Monetary Policy Committee (MPC) in December and February, hopeful home buyers rushed to shop and buy. According to a recent report by Zoopla, the UK house price increased by 8.1% in the twelve months to February. In comparison to February 2021, there was a 4.2% increase. The increase is impressive, but was slightly lower than the increase in January which was 8.4%.

Homeowners are shopping for remortgages according to experts. No wonder due to the many benefits a remortgage could offer a household while the economy is dealing with an ongoing global pandemic, a war in Ukraine, inflation at levels not seen in four decades, and rising interest rates. According to the LMS Monthly Remortgage Snapshot remortgages increased in February by 51%,

Homeowners are seeking remortgages. The opportunity to save money, to turn built up equity into cash, and the ability to lock in a long term deal to protect against rising interest rates are all reasons as to why a homeowner might desire a remortgage. Due to the Bank of England’s Monetary Policy Committee (MPC) having hiked the standard base interest rate at each of the last three meetings, it is not surprising that demand for remortgaging has grown and is expected to remain strong throughout the year.