Remortgage Rates May Soon be Changing from Their Cheap Level
Remortgage rates currently available from lenders could be threatened. The cheap deals that homeowners have come to expect to be around for a long time may be in jeopardy and may not be available for much longer. The UK economy is possible experiencing a second recession and the UK government debt has recently been marked with a “negative outlook” from the credit ratings agency Moody’s. There is a 30 per cent chance of a downgrade within the next 18 months. Should the UK government debt be downgraded from its AAA credit rating it could be a shock to mortgage holders.
Ray Boulger, the technical director of broker John Charcol, remarked on the possible outcome saying "Any downgrade could push up the rate that the Government has to pay in order to borrow, and if this happens then this should filter through to banks' borrowing costs and ultimately what you pay when it comes time to remortgage."
Recently remortgage lenders have become more cautious in their lending outlook. This led many lenders to pull their best remortgage deals. Some replaced them with slightly higher deals while others did not replace them at all. This has left fewer remortgage products on the market for homeowners to choose from though those available have remained very attractive with low interest rates on both fixed remortgages and trackers.
Homeowners that have had their mortgage deal end and are paying on their lender’s variable rate should especially consider a remortgage deal while the rates are cheap. Should the downgrade occur and the cost to lenders for borrowing be pushed upon consumers then the lender’s variable rate will change without notice and it will rise when it does change. Shopping for a remortgage now could give a homeowner on a tight budget more security in meeting their monthly payments.