Is Now the Time to Remortgage in 2024? Factors to Consider

Remortgaging in 2024 may be a strategic decision for many homeowners, especially in light of recent changes in interest rates and the economic environment. Here’s what to consider:

Current Interest Rate Environment

The Bank of England’s decision to maintain rates at 5% in September 2024 follows an earlier cut in August. More cuts are anticipated as inflation slows. Mortgage rates have declined from their mid-2023 highs, making remortgaging more appealing. Two-year fixed rates, for example, have fallen from over 6% to about 5.4%, with some deals below 4% for those with strong credit profiles. This environment provides opportunities for borrowers to secure lower rates than were available just a year ago.

Inflation and Economic Stability

UK inflation has decreased significantly, with the Consumer Prices Index (CPI) now at 1.7% as of September 2024, down from 2.2% in August. The broader CPIH, which includes housing costs, is at 2.6%. This easing of inflation has enabled the Bank of England to consider further rate reductions. For some, waiting for these cuts could make sense, but uncertainties such as economic slowdown risks could influence future rate adjustments. It’s essential to weigh the potential benefits of waiting against the current favourable mortgage offers.

Mortgage Market Competition

Lender competition remains high in 2024, with many introducing lower-rate fixed products to attract new borrowers. This creates opportunities for homeowners who wish to switch from higher rates set during the peak in 2023. Borrowers with significant equity or strong credit scores can often secure better deals, like five-year fixed rates near 3.75%. For those looking to switch from a higher rate, now might be a good time to shop around for the most competitive offers.

End of Fixed-Rate Terms

Homeowners who secured low fixed rates before the 2022-2023 increases may soon face the end of their deals. With the potential shift to lenders’ Standard Variable Rates (SVR), which tend to be higher, remortgaging now could lock in a more predictable payment structure. Even though current rates are higher than pre-2022 levels, they are more stable than the SVR rates. By acting before their fixed-rate term ends, homeowners can avoid higher monthly payments and secure a new, more manageable rate.

Personal Financial Situation

Evaluating your financial health is crucial before remortgaging. Even as rates decrease, those moving from historically low fixed-rate deals could face higher monthly payments. Understanding how a new rate would impact your budget is essential. Additionally, the current loan-to-value (LTV) ratio of your property can influence the deals available to you—lower LTVs generally unlock more competitive rates. Consulting with a mortgage expert can help you understand how these factors apply to your situation.

Conclusion: Is It the Right Time?

If your fixed-rate deal is expiring or you seek a better rate, now might be a good time to explore remortgaging, especially ahead of a potential Bank of England rate cut in November. However, if you have flexibility in your budget, waiting for additional rate cuts could yield better deals. Consulting with Mortgage One can provide tailored advice, ensuring you make the best choice based on your needs and market trends.

Ultimately, whether to remortgage now or wait depends on balancing your immediate financial needs with potential future rate changes. Mortgage One can guide you through this process, ensuring you secure the most suitable mortgage deal.