When will rate cut be passed on for fixed rate customets

Mr_Incredible

I just (few weeks ago) got a mortgage offer from Santander for a two year fixed rate.

the redemption on my existing mortgage is not due until 1 May.

Santander have already amended the variable rate mortgages accordingly but what about fixed rate offers ?

ToxicWomble

Surely by definition fixed rate means it’s fixed and isn’t subject to variations to the BoE rate.
You may however be able to apply for a different fixed rate mortgage which does reflect the recent change depending on what has been agreed/signed so far

Mr_Incredible

ToxicWomble said:

Surely by definition fixed rate means it’s fixed and isn’t subject to variations to the BoE rate.
You may however be able to apply for a different fixed rate mortgage which does reflect the recent change depending on what has been agreed/signed so far

Clearly what I mean is “are the banks going to reduce the interest rate on fixed rate mortgages, they offer as new products to the market”

prb1984

I also didn't think it was clear what you meant, so I can understand ToxicWomble's reply. 
As far as I am aware, it varies between lenders, but typically it trickles down and is seen in new rates in around 3 to 4 weeks time. The coronavirus and market instability may have an effect possibly though??

Thrugelmir

In such unusual times where events are unfolding by the hour. Likely to be a considered delayed response. 

Mr_Incredible

prb1984 said:

I also didn't think it was clear what you meant, so I can understand ToxicWomble's reply. 
As far as I am aware, it varies between lenders, but typically it trickles down and is seen in new rates in around 3 to 4 weeks time. The coronavirus and market instability may have an effect possibly though??

Coronavirus is the main reason for the BoE cut in the first place 

Mr_Incredible

Thrugelmir said:

In such unusual times where events are unfolding by the hour. Likely to be a considered delayed response. 

What?

[Deleted User]

Some lenders have reduced rates
Some will reduce them soon
Some have increased rates

There is no hard and fast rule about rates changing because if last weeks announcement 

Mr_Incredible

Deleted_User said:

Some lenders have reduced rates
Some will reduce them soon
Some have increased rates

There is no hard and fast rule about rates changing because if last weeks announcement 

So you don’t know 

I doubt very much any lenders will increase rates but thank you for your contribution 

kingstreet

At least two lenders increased tracker rates at the end of the week. Fixed rates are funded by money market rate swaps which are not base-rate dependent but which are based on interest-rate futures. Therefore, there may be no reduction in a fixed rate due to a reduction in the base rate as the two are unrelated.

Thrugelmir

Mr_Incredible said:

Thrugelmir said:

In such unusual times where events are unfolding by the hour. Likely to be a considered delayed response. 

What?

Lenders run mortgage books that run into many billions of pounds. The risk assessment team, that reports directly to the board of directors, will be running "what if" scenarios across these books. Assessing the potential damage that the virus outbreak could cause. This isn't just about interest rate cuts in isolation but the financial stability of the lenders themselves to weather the storm ahead.