House prices are forecasted to decline as affordability becomes an issue for hopeful home buyers. Yet, buyers are still showing up in the UK housing market as the opportunity to buy before interest rates rise further is a motivation for some. There is also the desire to buy for the same reasons as showed during lockdowns as many home buyers still express interest in finding more space in a new home. The latest house price data from Halifax reported between August and September a decline of 0.1% but taking a hard look at the data reveals more.

Homeowners should be alert to the rapidly changing lending environment. One could end up paying more than necessary if a smart financial strategy is not put in place. There are many factors at play taking a toll on a household budget, including inflation, higher energy costs, and higher interest rates. Of course, many households are still in recovery from the impacts of the global pandemic. The need for savings and relief is deep. There are benefits and opportunities available to homeowners through remortgaging that could offer savings and stability as interest rates rise to combat inflation.

Homeowners are choosing to take on a safety net with their remortgage by choosing long term fixed deals. In a recent report, a third of remortgaging homeowners noted they would only consider a long-term fixed rate to secure a current interest rate rather than face future rates. The Bank of England’s Monetary Policy Committee (MPC) is expected to make increases at each of their final meetings of the year which are scheduled for November and December. There is not a meeting scheduled for October, but the Bank has warned they would call an emergency meeting if needed.

Millions of homeowners have recently had their mortgage term end or are close to their term ending. Those that secured their loan only two years ago will have chosen from rates that were historically low but will now have choices from rates that are higher than in 14 years. If they do not remortgage at the end of their term, homeowners will be moved to their lender’s standard variable rate (SVR). Staying on a SVR could mean paying on a rate that could be double or more what might be found with a remortgage. Rather than pay more than necessary, homeowners are encouraged to shop for a remortgage and do so sooner rather than later.

Homeowners have been warned to consider a remortgage sooner than later. Those that allowed their mortgage term to end and did not remortgage were moved to their lender’s standard variable rate (SVR). Reports have shown that a SVR could be double or more the interest rate offered with a remortgage. In basic terms, the interest rate is the cost of borrowing. No one would certainly walk into a store and offer to pay more than double for an item when they could get it for less elsewhere. Rather than pay more than necessary, those on a SVR are warned to seriously shop for a remortgage, and so are those not yet on a SVR.

Last week the Bank of England’s Monetary Policy Committee (MPC) held their September meeting resulted in a vote to slow inflation by increasing the standard base interest rate to 2.25%. The 0.50% increase to take the rate above 2.0% is the seventh time the MPC has made a rate hike. The first increase in years occurred last December when the historically low interest rate of 0.1% was pushed to 0.25%. Including that meeting, seven consecutive gatherings have resulted in increases taking the rate to the highest level seen since 2008.