Will mortgage interest rates increase if coronavirus becomes an epidemic?

ReallyFace

We're due to remortgage in September and I would ideally like to go for a five year fix. We can do it now and lock in a rate of around 1.7% and I want to know if this might increase because of the coronavirus? No historic precedent so asking on here in case folk have any ideas?

A_Nice_Englishman

If I knew for sure I could be a wealthy man in a few months time!

The US central bank has reduced rates in the last few days. If the Bank of England do the same you might get a lower rate. But that's just speculation.

dunstonh

Interest rates go down to stimulate the economy.  They increase to stop it overheating.  (simplified as there are other controls available).

 No historic precedent 
yes there is.  The reasons for slowing economies vary but the medicine is frequently similar.

Thrugelmir

By not locking in now. What do you hope to achieve. There's a point at which rates cannot fall any lower. As banks have to make a commercially viable gross margin on the activity. 

foxy-stoat

They have just reduced the interest rate because of the virus and to help with the economy.  I would lock in when you can at the rate that you can afford.

AnotherJoe

As said, if anything they will fall.

ReallyFace

Thanks everybody for your help with this. I think I'll sit tight til after 26th March at least to see if the Bank of England cut has an impact. As Thrugelmir said they can't fall much lower but looking at numbers there's still £60k+ of interest to be paid on a remortgage of £154k so anything that could come off of that would be a bonus.

Cheers again

dimbo61

I am willing to bet you are paying more on your current mortgage deal  right now so why not reduce the term by a few years so you pay it off early.
Become Mortgage Free quicker, Pay less interest over the shorter term.
Win win win 

Thrugelmir

ReallyFace said:

Thanks everybody for your help with this. I think I'll sit tight til after 26th March at least to see if the Bank of England cut has an impact. As Thrugelmir said they can't fall much lower but looking at numbers there's still £60k+ of interest to be paid on a remortgage of £154k so anything that could come off of that would be a bonus.

Then overpay. Control your own destiny. One day interest rates will normalise. As the monetary experiment will end. 

My_username

@ ReallyFace what have you ended up doing? I’m in a similar situation..

dimbo61

It's now a world wide Pandemic and banks under instruction  from the Bank of England are bailing out thousands of companies up and down the country with millions of workers on furlough.
If you can now fix online with your existing lender and have no plans to move then Why Not ?