Without a Remortgage Many Homeowners Will Have to Make a Shift in Their budget

Homeowners have a lot of weight on their shoulders right now and the thought of pursuing a remortgage can just seem like one more thing on a very long list of items to do. However, it may do the homeowner good to move up the remortgage item to the top of the list and make it a priority. Forecasts from analysts are calling for the interest rate to increase from 0.5 per cent to 2.0 per cent next year. Planning for that increase in the interest rate could make all the difference and a remortgage could be the defense of financial stress.

It has been determined in many surveys that there are a majority of homeowners that are not familiar with their current mortgage rate or deal. If this is truly the case then there will be many that will be shocked when that first interest rate increase occurs and they see the impact on their monthly mortgage. The extra drain on the household budget could be very difficult.

Andrew Sentance, a Monetary Policy Committee (MPC) member, who has been asking for an interest rate increase for months has warned that the longer the rate goes unchanged the more households should prepare for a much larger first time rise. In a recent statement he stated that to prepare and get ready for what might lie ahead that families should be aware of City forecasts and take to heart what could happen. This means that those with an average mortgage should be looking to add another £100 a month in mortgage expenses to their budget.

To avoid the risk from an interest rate homeowners have been looking to secure fixed rate remortgages. Despite the increase in remortgages, there are still a very large number of homeowners capable of leaving their lender but sitting on a variable standard rate mortgage just waiting for their expenses to go up when the interest rate rises. Once it does the remortgage deals available now will be long gone and a shift will need to occur in the homeowner’s budget. If there isn’t much shifting that can be done, then a meeting with a remortgage expert could be helpful to ward off the forecasted warnings.