After weeks of disturbing news throughout the Globe, the mortgage and financial markets within the UK (as well as the mortgage broker) have breathed a huge sigh of relief
this morning after the news that the US Senate and Congress may have finally struck a deal to alleviate the national debt crisis which could have brought the Global economy in to meltdown once more. The rescue package is likely to have a domino effect throughout the world, with the Asian markets already picking up after days of uncertainty, an increase in the European markets and the UK markets set to improve with an increase in consumer confidence.
With funding rates at an all time low within the UK and fixed rate mortgages at their lowest levels of all time, the UK mortgage market has been offering favourable mortgage deals for the right client with finance available. After years of recovering from the previous global economic crisis triggered by the sub prime property fiasco and the fall of Lehmann brothers, a default of US payments could have triggered a collapse similar to that seen in 2008.
The recovery plan set out by the Republican and Democratic leaders within the US has seen the US debt ceiling rise by up to $2.4 trillion as Congress commit to reduce the deficit by a similar amount over the next ten years in an attempt to save the USA from losing its AAA credit rating. Although President Obama has described the plan as ‘not the greatest deal in the world,’ it is likely that the world’s largest economy will be spared the humiliation of defaulting on their payments and seeing their credit rating lost. A new congressional committee is likely to be recommended by the new plan to, aiming to find a deficit reduction proposal by November.
For now at least, whatever else that has been happening in the world has seen UK mortgage lenders still seem hungry for action, pleasing the mortgage broker. It would have been unheard of years ago for the right individual to be able to borrow at 1.90% within the UK, with certain individuals able to fix their mortgage for 2 years at 2.49% and for 3 years at 3.15%.
We can only hope that the US Congress and Senate are able to sort out their differences and save the world’s biggest economy from financial collapse. If this deal had not occurred, the results seen across the world could have been disastrous.