Mortgages  

Cashback and lowered rates boost Virgin Money deals

Cashback and lowered rates boost Virgin Money deals

Virgin Money has cut rates on several residential and buy-to-let fixes and introduced a £300 cashback incentive on selected deals for purchase customers with small deposits.

Residential three-year fixes have been discounted to 1.79 per cent to 70 per cent LTV; 1.84 per cent to 75 per cent LTV; and 1.89 per cent to 80 per cent LTV. The trio of deals come with a £995 product fee and £300 cashback for purchases.

The rates applicable on five-year fixes have also been lowered to 2.18 per cent and 3.19 per cent to 65 per cent LTV and 85 per cent LTV respectively, with no product fee.

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For borrowers with a 5 per cent deposit, the rate is 4.19 per cent – also with no product fee and £300 cashback for purchases.

Meanwhile, a two-year buy-to-let fix at 70 per cent LTV is now available with a reduced rate of 2.09 per cent, £1,995 product fee and £500 cashback. The five-year fix commands a rate of 3.24 per cent with a £995 product fee and £500 cashback.

In addition, the lender has lowered its two-year tracker rate to 75 per cent LTV to 2.29 per cent with a £995 product fee and £500 cashback.

Provider view

Peter Rogerson, Virgin Money’s commercial director for mortgages, said: “The reductions we have made to our range ensure that we continue to offer attractive options for purchase and remortgage customers looking for residential and buy-to-let loans at different deposit levels. We think these products will be well received by the market, which remains upbeat as reflected in our recent poll of intermediaries where nearly 80 per cent said they expect the mortgage market to grow in 2017.”

Adviser view

Commenting on the five-year fix at 95 per cent LTV, Phil Anderson, director at Aberdeen-based Phil Anderson Financial Services, said: “That sounds like a pretty reasonable deal. I think some of the smaller building societies down south have lower rates, but we in Scotland do not have access to them.”

On the five-year buy-to-let fix at 70 per cent LTV, he said: “This is also a good deal. Any loans with a rate lower than 3.24 per cent tend to carry a higher product fee.

“I am getting more home purchase enquiries at the moment. I think all the changes made to buy-to-lets have been more on the negative side. On a more local level, the slowdown in the oil and gas industry here in Aberdeen has seen rents dip.”

Charges

Ranging from fee free to £1,995.

Verdict

The mortgage market remains as competitive as ever and provides much food for thought for borrowers with existing mortgages to review their current deal. Going by Mr Anderson’s comments, it seems the changes to stamp duty on buy-to-lets and the scrapping of the buy-to-let tax relief has deterred people from entering the market. Still, buy-to-let mortgage rates have never been lower, and are likely to encourage many investors to enter the market.

The advent of competitive loans for borrowers with a lowly 5 per cent is also welcome. These loans are likely to increase in popularity once the government’s Help to Buy scheme is closed to new mortgages at the end of the year.