Remortgage Demand Grew with Warnings of a Possible Interest Rate Hike

According to several reports recently released, homeowners didn’t sit idly when the warning grew of a possible interest rate hike by the Bank of England’s Monetary Policy Committee (MPC). The forecast of a possible rate increase was pushed off until possibly August or even as late as November when the inflation data revealed the MPC would not have to intervene so quickly. However, during the warnings homeowners turned out to secure remortgages and increased the rate of demand over this same time last year.
Despite the forecast shifting to a later date for a change in the Bank’s standard base rate, homeowners that did remortgage to escape paying more with their repayments should be happy with their deals.
Lenders are currently offering a very wide choice of remortgages, including some that are targeted to older adults that used to be shut out of getting a new deal.
Interest rates remain low and fixed rates are also of abundant supply from both lenders and remortgage brokers.
Yet, there are still many homeowners that are sitting on their lender’s standard variable rate (SVR) and that could be a risky choice. The SVR of a lender is the new rate that replaces a homeowner’s old rate when their mortgage term ends if they do not remortgage. The SVR is risky in that a lender can quickly choose to adjust it with short notice to homeowners. The surprise of learning that one’s repayments will cost more offers little time for the homeowner to shop for and secure a remortgage. For those homeowners that want more security in their household budget a fixed rate remortgage is a better choice.
Despite the possible delay in the MPC increasing the interest rate, homeowners are still encouraged to seek out a remortgage now while there are attractive deals available. Doing so will secure a deal that will offer peace of mind for years to come against paying more than one has to should interest rates increase in 2018.