Spellman Financial Services

will mortgage rates fall?

Will Mortgage rates fall?

What have interest rates fallen by?

11th March 2020: 0.75% to 0.25%.

19th March 2020: 0.25% to 0.10%

Following the announcement by the Bank of England to lower rates to 0.10%. Lows not even seen during the financial crisis.

Borrowers have been desperate to know if or when will Mortgage rates fall. And if so, when will be the best time to get a Mortgage in 2020.

Unexpectedly, this hasn’t just been new customers asking this question. The majority of enquiries have come from our existing customers who already have Mortgages approved.

A bit of background

It would make sense to believe that following the base rate being lowered to records levels. That interest that is charged to borrowers would also fall across the board.

Whilst this is what is expected. It doesn’t necessarily mean it is going to happen.

To give you an example.

Following the announcement on the 19th March 2020 to cut interest rates to 0.10%. One lender actually increased the rate payable on their new business Tracker Mortgages by up to 0.30%.

What Mortgage rates will be most affected by interest rates cuts?

Mortgage Lender Standard Variable rates, or “Reversion rates”.

Bank of England Tracker rates, which are already in place and secured against a property.

Will Fixed Interest rates fall?

Not necessarily and they certainly don’t have to.

Fixed Rates are already at record lows.

So, whilst the reduction in rates will likely help keep them low. It doesn’t mean lenders have to continue to reduce these rates.

It simply wouldn’t be profitable for Mortgage Lenders to lower their Fixed Rates by another 0.65%.

Will Variable Interest rates fall?

In this instance. Variable interest rates relate to the Mortgage Lenders Standard Variable Rate or reversion rate. The rate you will automatically move onto – if you don’t Remortgage or complete a product transfer – after your fixed or tracker rate comes to an end.

In this instance, yes. Standard Variable rates should and in most cases will fall.

This is obviously great news for the around 25% of Mortgage Borrowers who are on this rate.

However, they shouldn’t be on this rate anyway.

It is almost always cheaper to Remortgage or take out a Fixed Rate with your existing Lender.

When will Mortgage rates fall?

After a Bank of England Base rate change, those rates that are eligible for change are usually changed within 28 days.

Why won't all Mortgage rates reduce?

Interest rates on products such as Fixed Rates are already seen as promotional rates or new business rates, designed purely to attract new borrowers.

The reason Fixed Rates are already so low is due to competition among other lenders.

This competition has already drove Fixed and tracker rates to record lows.

When should I get a Mortgage in 2020?

If you are Remortgaging, anytime. We anticipate Mortgage rates to stay low for some time, at least for the remainder of this year.

If you are moving home or are a First Time Buyer, this will be down to your personal beliefs and circumstances.

Many people believe house prices will fall as a result of the current economic climate. Others believe it’ll be a good time to get a deal on a home. As once the uncertainty ends, a boom will occur.

How long will interest rates stay low for?

Once the Coronavirus fears start to subside, the Government is going to want people to spend and borrow. This gets the economy moving, and they’ll be a lot of catching up to do.

The best way they can do this is by keeping Interest rates low.

This discourages people to save and encourages people to borrow.

That’s why in our opinion Rates will maintain their record low for the majority of this year at least.


Whilst Lender standard variable rates and tracker rates already in place and secured against your property will be positively affected by the falls.

New business tracker and fixed rates, including existing borrower products are unlikely to see falls to them at all.

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