Cheap Remortgage Deals May Soon be Less Cheap
Cheap remortgage deals may soon be slightly less cheap if the UK economic debt continues to be at risk of losing its AAA rating. The credit rating company Moody’s recently put the UK on a negative outlook and has given it a 30 per cent chance of downgrading in its rating over the next 18 months. This could have a considerable impact on both taxes and interest rates should the downgrade occur.
David Black, an analyst with the financial information group Defaqto is warning consumers to take steps now to protect their financial health. Mr. Black said: "No one is certain as to what will happen with the credit rating and how this could impact personal finances; so try and pay off expensive debt, review your existing arrangements, and if you have a reasonable level of savings and a mortgage and are a higher-rate tax payer, look at the possibility of an offset mortgage.
"Any increase in government borrowing costs or the pressure of a potential downgrade is likely to lead to higher personal taxes.
"After all, the Government will need to fill its black hole and crucially show foreign investors that it is serious about getting the deficit down."
Lenders are likely to raise their interest rate offerings and that means that cheap remortgage deals will disappear. The movement downward to the level that remortgages now sit has come over time and should an increase occur in the offerings they will not fall backward quickly in a rebound. Homeowners that could benefit from a cheap remortgage should consider securing one now.