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You may have spent much of 2009 happily remaining on your lender's standard variable rate – but is it time to move away from the low rate?

Because the Bank of England has kept rates at 0.5% since March 2009, SVRs have been as low as ever. As a result, people have felt pained to remortgage because they would not find a cheaper deal anywhere else.

But the Office of National Statistics recently revealed that inflation spiked in December by 1%, up from 1.9% to 2.9%. This has led many to predict that the Bank of England may be forced to increase rates sooner rather than later.

If the Bank does increase rates it will mean that your mortgage may rise by hundreds of pounds a month. A rate shock may mean that your finances suffer and your mortgage may fall into arrears if you are not ready to cope with the extra cost.

So it might be time to remortgage now before you experience a rate shock. Talk to a financial adviser about taking out a fixed rate loan that will not change for a few years. It might be pricier now, but it might make sense to jump before the low SVR ship sinks.

SOURCE: ONS, 19/01/10

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