The Bank of England’s Monetary Policy Committee (MPC) meet once more for their monthly meeting to discuss the state of the economy and the need to change or leave intact the current standard base interest rate.  It came as no shock that the MPC left the rate at the historically low level of 0.5%.  The rate has gone unchanged by the committee since March 2009.  While homeowners and homebuyers may have let it go by unnoticed that another month of low rates is in reach, they have also lost focus of the fact that it brings the MPC one month closer to when the rates will be hiked.

Experts believe that with the state of the economy staying as it is and if growth continues on an upward path as it is now, the committee will have no choice but to start raising the interest rate by early 2015.  While this may seem far off for those thinking that they need to secure a low interest rate through a new purchase mortgage or remortgage, it really isn’t.  Going through the processing for a loan approval takes much longer than in the past.

The Mortgage Market Review guidelines now require a lender to confirm that the borrower is indeed capable of paying back the loan, even if interest rates increase over the life of the loan.  These guidelines were put into place to assure responsible borrowing.  What it means for borrowers is that they must now share more intimate details about their spending and saving habits with lenders.  The lenders must comb through the data and make sure the borrower can pay back the loan and part of the process is putting the borrower’s data through a stress test against higher interest rates.

It is important that homeowners seeking a low interest remortgage start shopping around for a new deal with plenty of time in front of them.  The process will not be quick and easy, even for great credit history borrowers.  Plenty of time for gaining an approval, gathering of the required paperwork, shopping around for the right deal and perhaps using the services of a remortgage broker expert could make all the difference in protecting one’s financial health.  Time is of the essence, the MPC will be hiking the interest rate and that is for certain.