Fixed-rate mortgages 'likely to get even cheaper' following Brexit

Fixed-rate mortgages 'likely to get even cheaper' following Brexit

A fall in gilt yields will reduce the cost for lenders of longer term funding and hence open the door for even cheaper fixed rate mortgages, according to Ray Boulger of John Charcol.

Given that most mortgage lenders did not pass on much of the pre-referendum reductions in rates, Boulger expects to see greater price competition, especially in the longer term fixed rates, helping to push already cheap fixed-rate mortgages to new lows.

He forecasts that many lenders will follow HSBC's lead and slash five-year fixed-rate mortgages priced to below 2% - perhaps at around 1.95% - and advised those thinking about taking out a fixed deal to "hold off for a week or so and see where the market settles down".

However, he acknowledged that might be easier for those looking to remortgage than people trying to buy a house right now.

A longer term look at implications for the housing market suggests demand for property will continue to increase, Boulger added.

"Until we actually leave the EU, immigration is likely to continue especially in the run up to any potential tightening of border controls."

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