Interest rates have been increased for the first time in a decade. Not since July 2007 has the Bank of England’s Monetary Policy Committee (MPC) majority voted to raise the standard base interest rate. Experts had warned that a rate hike was possible by the end of the year, and as early as the November meeting which occurred earlier today.

The base rate had been steady since March 2009 at 0.25%, but will now be doubled to 0.50%. The MPC voted 7-2 according to the meeting’s minutes for the increase of the rate by 0.25%.

The fact that it has been a decade since the last increase, it means that there are millions of homeowners that have never experienced an increase in their repayments. It may come as a shock to some household budgets and put many scurrying to find relief through a remortgage.

Lenders will be choosing how to respond to the increase with their mortgage customers. Some may absorb the increase to the cost of borrowing in an attempt to keep customers, but if so it may be for a limited number of mortgage holders or for a limited amount of time. Other lenders will be quick to increase their variable rates putting a quick hurt on many households that are already facing financial hardships.

Experts suggest homeowners that find the prospect of paying more interest on their mortgage unfavorable to start shopping for a remortgage soon. There could be great deals to be found for those that take action quickly as lenders may keep their best deals on the market for a short time before replacing them in the hopes of competitively tempting customers away from competitors. That competitive environment will be an advantage for homeowners that seek a fixed rate remortgage for the security against rising rates.