Experts suggest that interest rates are set to rise steadily next year and reach a level of 1.75% above the Bank of England’s current standard base rate of 0.5%.  The level that remortgage and mortgage interest rate offers will increase is due to be as much if not more.  With current lending cheap and affordable, homeowners must ask themselves if they can wait to remortgage or hold out.

Many homeowners may find themselves in financial difficulty when interest rates begin to rise.  They may be set for a surprise at the level their mortgage repayments will reach.  If not prepared, bypassing a remortgage now while a cheap interest rate could be secured might cost a homeowner thousands of pounds later on when they see the rates increasing.

Remortgages have been in demand from many homeowners but others are choosing to remain on the standard variable rate (SVR) of their lender after converting at the end of their mortgage term.  It is true that many SVR levels are low and some below remortgage offers on the market, it is a risky interest rate to be on when economists are assuring that interest rates will be increasing next year.

Homeowners have the advantage of the fact that many have gained equity in their properties with the increases in house prices over the last few months.  This trend is expected to slow as prices are slowly reaching levels that will make buying less affordable.

With the new Mortgage Market Review due to start in just a few days, homeowners should also be reminded that remortgages will not be as fast a process as in the past.  More paperwork should be expected and more time to gain an approval.

The effort to shop around for a new remortgage deal, as well as complete the process, should make homeowners consider how the remortgage offers will look down the line.  They must decide if they need to start getting serious about a new deal now and save money with a lower interest rate or if they can indeed afford to wait.