Mortgage holders have been given a break it would seem as the warnings of an impending interest rate increase by the Bank of England has quieted.  What was expected to happen at the beginning of 2015 will now more likely occur in the spring when the Monetary Policy Committee (MPC) will move the rate from its historically low level.  The rate currently sits at 0.5% and is expected to increase by increments of 0.25% in the first few changes as it has been said the rate will rise “slowly and steady” to a more normal level over the next few years.

The UK economy has fared better than most global economies and is on the path to recovery but it has slowed down over recent months.  This has led to the change in the forecast for an interest rate hike.

There are still warnings coming from mortgage experts as they encourage homeowners holding a mortgage to consider a new deal now if it would save them money.  According to a recent study by ICM research it was discovered that one third of mortgage holders would struggle if the interest rate increased.  Only a 2.0% increase would lead to financial problems for 32% of UK borrowers.  Mortgage holders in the south-east of England would have trouble with their repayments by a level of 39% should the rates increase to 2.5%.

Currently there are very good remortgage deals on the market from lenders.  Many have the lowest interest rates seen in years and long fixed terms.  Those homeowners that have had their mortgage deal end and have moved to their lender’s standard variable rate (SVR) and those close to having their deal end should start shopping around for a deal that would benefit their unique remortgaging needs.  For some, even taking on a fee for switching to a new remortgage would be worth the cost due to the savings that can be found in many of the remortgage deals currently being offered.