Need To Remortgage | Professional Insights into Rising Rates

Several factors have led to the surge in mortgage costs. The most prominent is the Bank of England’s base rate, held at 5.25%. The central bank has been cautious about lowering the rate in response to inflationary pressures and economic uncertainties. Consequently, many homeowners need to remortgage.

Inflationary Pressures: Recent high inflation is a primary driver behind rising mortgage costs. Inflation erodes the purchasing power of money over time. This makes each pound worth less in the future. The BOE often increases interest rates when inflation rises to curb inflationary pressures. Higher interest rates make borrowing more expensive, reducing consumer spending and slowing the economy. This, in turn, helps mitigate inflation.

Central Bank Policies: Central banks like the Bank of England are crucial in setting interest rates. They adjust policy interest rates to control inflation or stimulate the economy. The recent trend of pay increases indicates a growing economy. This can trigger central banks to raise interest rates to prevent overheating and excessive inflation. Consequently, more homeowners need to remortgage.

Anticipated Rate Hikes: The expectation of future interest rate increases impacts mortgage costs. When financial markets anticipate central banks will raise rates, mortgage lenders adjust their rates in advance. This leads to higher mortgage costs for borrowers before official rate hikes occur, further emphasising the need to remortgage.

Economic Recovery: Pay increases are a positive sign of economic recovery. As employment opportunities expand, employers offer higher wages. While this benefits workers, it pressures central banks to raise interest rates to avoid overheating the economy. When interest rates rise, borrowing costs, including mortgage rates, also highlight the need to remortgage.

Global Economic Conditions: International economic conditions also influence domestic mortgage rates. Factors such as geopolitical events, trade tensions, or international financial crises affect interest rates. Investors seek safe havens in response to global uncertainty, driving up bond demand and lowering yields. Since long-term bond yields influence mortgage rates, this can lead to higher mortgage rates, necessitating the need to remortgage.

Connect Mortgages stands out as a beacon of hope in this challenging economic landscape. Homeowners are grappling with the burden of surging mortgage expenses.

Brokers, as a whole, consistently play a crucial role in enabling resilience during economic uncertainty. This is particularly true for Connect Mortgages’ dedicated brokers. Our expertise and commitment are invaluable for those lacking financial literacy when remortgaging.

Connect Mortgages has established itself as a trusted sanctuary for homeowners. Moreover, we aim to explain why homeowners avoid seeking professional help. Our approach empowers borrowers to face financial challenges looming between now and May 2024.

Over the past 13 years, borrowers have enjoyed low interest rates, often starting at 1, 2, or 3 per cent. However, it’s important to acknowledge that this era is behind us. Borrowers must confront a new reality and adapt to interest rates in the 5 or 6 per cent bracket. By doing so, they can prepare for a changed financial landscape. This ensures their well-being and informed decisions align with evolving economic circumstances.

If you are among the 630,000 homeowners facing higher borrowing costs, consider contacting Connect Mortgages. Our team of experienced advisers is ready to assist. Don’t let rising mortgage costs catch you off guard. Connect with Connect Mortgages today and take control of your financial well-being. When you need to remortgage, Connect Mortgages is here to help.