Despite rising interest rates, or perhaps because of them, borrowing is currently popular. The standard base interest rate set by the Bank of England’s Monetary Policy Committee (MPC) has increased at each of the last six consecutive meetings which started last December. The then rate was at an all-time low of 0.1% which was certainly the motivation behind most of the borrowing done in 2021. The rate had been dropped to an over 300 plus years low due to the economic impact of the global pandemic.

The rate has been increasing this year during each meeting by 0.25%, but because of growing inflation it was increased at the August meeting by 0.50%. It was the highest increase by the MPC in 27 years. The rate is now at 1.75% and is not expected to remain at that level for the rest of the year. More increases are likely as the forecast for inflation was raised to a possible 13.3%.

Surprising experts when the pandemic took its deep hold and lockdowns began, the UK housing market saw strong growth. The desire for more space both inside and outside the home pushed buyers to the market as the “Race for Space” began. It still lingers to some extent. Homeowners are thought to not be so put off by the market due to rising rates, but by low supply of properties on the market.

Home builders found it difficult to work and find supplies during the pandemic which caused a slowdown of new properties coming to market. Home movers were busy purchasing, but so were second home buyers which made for more competition for the properties, especially starter homes sought by first time buyers.

The rise in demand in the housing market shot up pricing as well as home values. The extra equity built into the properties is now a golden ticket of sorts for those seeking cash funds.

Some homeowners are choosing to obtain a second mortgage with reports of a 50% growth in May 2022 over May 2021 in homeowners seeking second mortgages. 

There are also many homeowners choosing to remortgage and cash out equity as well. An equity cash release remortgage offers the ability to obtain a remortgage and have cash in hand at the end of the deal. A popular choice in remortgaging is a fixed interest rate to lock in a current rate and avoid any further rate hikes for the duration of their chosen term. Whether two years or ten years, the length of the term will allow them to enjoy the rates offered today and avoid paying more than necessary should the rates increase again and again as predicted.

The cash from remortgaging or second mortgages is being used by homeowners for a variety of needs. Some are paying down credit card debt to avoid the higher rates and some are paying off personal loans. Others are using the money to make improvements and upgrades to their property, including paying for more energy efficient heating systems prior to winter. 

Still others are using the funds to pay for life events that were put off during the pandemic. Some are paying for much needed holidays while others are funding weddings. Weddings are certainly filling many social calendars from full on events such as the one this weekend of Jennifer Lopez and Ben Affleck to destination events by eloping couples making the most of fewer travel restrictions.

No matter the use of the funds from a cash back remortgage or second mortgage, the opportunity to fund needs through built-up equity over the past years is one to certainly be considered. Experts suggest homeowners question experts as the choice is not right for everyone and second mortgages are considered risky for most. 

However, shopping for a remortgage is encouraged by experts as it offers the ability to determine what opportunities and benefits are available to save, avoid risk, and often give peace of mind.

Shopping online for a remortgage is quick and simple by going to each lender’s website or doing a one-stop visit to a remortgage broker and obtain quick quotes from various lenders all at once. Then perhaps, with information in hand, the homeowner can make their own personal decision as to how they want to prepare for the economic struggles in the days ahead, fund a life event and make memories, or both.