What actually moves mortgage rates

It is a common assumption that when a central bank cuts rates, mortgages get cheaper the same week. Sometimes they do. Often they don't — and occasionally they move the other way.

Fixed rates follow long-term funding

A lender writing a long-dated fixed-rate mortgage must fund it for a long time. That funding is priced off long-term markets: government bond yields, mortgage-backed securities in the US, covered bonds and swap rates in Europe. Those markets price expectations for inflation and growth over years. If a rate cut arrives already anticipated, long yields — and mortgage pricing — may not move at all.

Variable and tracker rates are different

Trackers and short-reset variable products are linked to a reference rate that follows policy closely, so they respond quickly. This is the trade-off in choosing a product: a fix buys certainty for a period, a tracker passes changes through in both directions.

The lender's spread

• Credit risk: expected losses across the lending book.
• Operating costs: origination, servicing and compliance.
• Capital requirements: the equity the regulator requires against the loan.
• Competition and lending appetite in the quarter.

Wallcrest does not publish forecast mortgage rates. Current pricing should be taken from lenders directly, and any comparison should include fees, not headline rates alone.