Maddox told Mortgage Solutions that falls in swap rates over the last two weeks would make it more likely the Bank of England would hold or potentially reduce its key base rate.
But Maddox highlighted that he does not anticipate major shifts in mortgage rates unless the economic situation becomes more serious.
Markets have reacted strongly to the spread of the coronavirus as fears about its impact and potential impact on some industries have scared many investors.
The FTSE 100 in London is currently suffering its worst week since 2011 – dropping more than 500 points since Monday, while European and North American markets have tumbled.
Government bond yields have also fallen in the US and this has led to predictions of mortgage rates dropping notably across the Atlantic, but that may be some way off in the UK due to the differing way mortgage lending is typically funded.
Swap rates sliding
“In the UK, we have seen swap rates come down from about 0.65 per cent to 0.55 per cent in the last 10 days, as the market is predicting slower central bank rate increases,” Maddox said.
“For mortgages, lenders also have an eye on deposit rates, but there will definitely be an impact and I think it will help keep mortgage rates down.”
However, Maddox noted there could be pressure from external funding sources which may prop rates up if funders chose to wait out the impacts of the virus.
“The cost of wholesale funding could go up a little bit as investors may sit on the side lines, so if the cost of borrowing for big UK banks goes up then that would counteract the reduction in swap rates and push mortgage rates up,” he added.
