There is a growing warning that the Bank of England is closer to increasing the standard base interest rate than ever before. Despite the need of the Monetary Policy Committee (MPC) to increase the rate to stabilize the economy, there might be a side effect that could be devastating. According to new data released by the Financial Conduct Authority (FCA) half of the population is financially vulnerable to an interest rate increase and one in six people will be completely unable to deal with only an increase of £50 to their monthly budget.

Homeowners are especially vulnerable, as the repayment of their mortgage is likely the largest expenditure in their monthly budget. Many homeowners have had their mortgage deal end and they have been moved to their lender’s standard variable rate (SVR), which is risky as a lender can increase their repayment interest rate with little notice putting pressure on their monthly budget.

To escape a SVR a homeowner can remortgage and a fixed rate remortgage could offer not only savings with a lower interest rate, but security against rising rates for years to come.

Paying more than one needs to on a mortgage isn’t just a concern for those that have had their mortgage deal end. Homeowners that are close to having their deal end could also benefit from a remortgage before interest rates increase. In some cases, even paying a fee to close a deal early is offset by a lower interest rate savings and the peace of mind found in a fixed rate remortgage.

Since remortgaging takes time to complete time is of the essence for those that are financially vulnerable to an interest rate increase across the board in their borrowing. A cash equity release remortgage could offer another solution and allow homeowners in the right situation to consolidate debt taking away further budget pressure.