Homeowners are being encouraged to shop for a remortgage. The opportunity to save money and build a safety net against rising interest rates is a possibility. During times when inflation is in rapid growth and causing financial issues for family budgets it makes sense to seek any relief possible. However, since the interest rate is the important factor in choosing a remortgage for many homeowners it could be a mistake to choose one simply for the fact it has the lowest interest rate.

In what is thought to be a rush to buy before interest rates were hiked upward making borrowing more expensive, hopeful home buyers showed up to the housing market and are still seeking affordable housing in which to climb onto the property ladder. The task will be difficult as the average asking price according to Rightmove, an online listing site for property, has exceeded the previous high and is now at £354,564. That level is 1.7% higher than in February or at a value of £5,760 more.

As expected the Bank of England’s Monetary Policy Committee (MPC) met on Thursday, 17 March, and increased the standard base interest rate. For the third meeting in a row, the rate was hiked and to 0.75%. Considering before the first rate increase occurred in December the standard base interest rate of the Bank was at an all-time, over 300 plus year historic low of almost zero at 0.1% and it is now over seven times that rate, homeowners are encouraged to take notice and prepare for even higher rates and perhaps tightened lending.

Homeowners have shared in surveys that many are confused about remortgaging, the benefits, and for some exactly what a remortgage actually could do to help, especially in economic times when interest rates are on the rise. Increasing interest rates are exactly the forecast throughout the year and into next by experts. Therefore homeowners are encouraged to learn all they can about remortgages and strategize to save money rather than pay more than necessary.

Warnings of interest rate increases have caused a rush to remortgage according to recent reports. In an attempt to escape paying more due to higher interest rates, homeowners have taken action and sought a new deal. According to the Bank of England, there was an increase in the number of remortgages in the last quarter of 2021. The number of homeowners seeking remortgages is expected to grow due to continued threats of rising rates and the tightening on budgets due to increasing inflation.

In December, the historically low interest rate of the Bank of England disappeared, perhaps, and we would actually hope, forever. Very low interest rates are a sign of economic difficulty. The UK economy has been negatively impacted in the last few years with a recession, Brexit, and a global pandemic. The war in Ukraine will now be putting pressure on the economy. The many factors of the pandemic have had an economic impact causing a rise in inflation and while all consumers should beware, homeowners should definitely be taking notice.