MortgagesDec 3 2015

Virgin Money unveils intermediary-only BTL range

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Virgin Money has launched a new range of intermediary exclusive buy-to-let products at 75 per cent LTV with rates starting from 2.59 per cent.

The 2.59 per cent rate is applicable to a two-year fix with a £1,995 product fee and a two-year tracker with a £995 product fee.

In addition, the lender has unveiled a five-year fix, available at 3.65 per cent with a £1,995 product fee to sit along its more than 25 broker-exclusive products.

Following the fixed rate or tracker period, the loan will revert to Virgin’s BTL variable rate - currently set at 4.99 per cent for the life of the loan.

In late October, the lender made a number of reductions across its range of mortgages.

Some of the more notable changes made to residential loans include three-year fixes at 90 per cent LTV which were discounted by up to 0.31 of a percentage point and now start from 3.13 per cent, with a £995 product fee, £300 cashback for purchases and £500 for first-time buyers.

Meanwhile, the provider launched a five-year buy-to-let fix at 60 per cent LTV, available exclusively through intermediaries, priced at 2.99 per cent with a £2,495 product fee and £750 cashback.

Provider view

Peter Rogerson, Virgin Money’s commercial director for mortgages, said: “We are delighted to continue to support the mortgage market through the introduction of competitive new intermediary exclusives for the BTL sector. We are also maintaining the £750 cashback offer across our intermediary exclusive BTL range for a limited period.”

Adviser view

Commenting on the two-year BTL fix at 75 per cent LTV, Kevin Gates, of London-based IFA Gates Financial Services, said: “The product is fairly competitive but I have seen lower rates in the market.

“The same goes for the two-year tracker loan - although the product fee is quite good. It seems that Virgin and other lenders are keen to shift away from fixes ahead of a rise in rates.

“The rates for trackers are usually lower than the fixed rate equivalent. Most lenders have an expansive mortgage range on offer, and because of this, many of them have not got around to lowering the rate of interest on their trackers.”

He added: “An intermediary exclusive product range is obviously good news for advisers. Some of the products are excellent products, but Virgin is not the easiest lender to deal with.

“I do not think that base rate will rise until around this point next year. Recent acts of terror have brought in a degree of uncertainty, while a rate rise will leave a large number of people who are in debt in a worse position.

Charges

Charges range from £995 to £1,995.

Verdict

Many lenders have taken the move to make their tracker options even more desirable than fixes, as a hike in base rates appears more probable. At the height of the mortgage price war, the rate of interest applicable to tracker mortgages were less than the fixed rate equivalent. Here, Virgin has opted to lower the product fee for the tracker option by £1,000 – which is a substantial sum of money for those looking to take out a low-value mortgage. Whether this will be enough to persuade customers to choose the product over the fixed equivalent remains to be seen.