Virgin Money  

Virgin revamps buy-to-let and residential deals

Virgin revamps buy-to-let and residential deals

Virgin Money is offering a £750 cashback incentive on buy-to-let renewals this Spring.

The lender is targeting landlords coming to the end of their existing deals in the coming months and has also launched a range of 90 per cent loan-to-value (LTV) residential mortgages, up from its typical maximum loan-to-value of 75 per cent.

The new products, which feature reduced rates on two and three-year fixed rate products, are available from today (16 March) and for a limited period, the lender said.

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It would not disclose the end date as yet but said it would issue a notice withdrawal prior to the deals being removed from market.

The lender is offering its two-year residential fixed rate at 1.89 per cent plus a £995 product fee, while the three-year fixed rate incurs a 2.18 interest charge plus fee.

Andrew Asaam, director of mortgages at Virgin Money, said: "We are delighted to introduce these limited edition products to our mortgage range. 

"We have launched a market-leading £750 cashback incentive to help landlords with costs and the new residential products will provide further support and choice for customers with smaller deposits."

The lender's move comes as brokers told specialist lender Precise Mortgages they are concerned about a buy-to-let remortgage crunch as the stamp duty anniversary looms. 

This April marks two years since the introduction of the higher stamp duty rates for those with more than one property.

Buy-to-let investors rushed to secure mortgages to buy properties ahead of April 2016 when the new rules kicked in.

Two years later many will be looking to remortgage as their initial fixed deals come to an end.

Virgin also offers 60  per cent and 75 per cent LTV products, which are charged at 1.39 per cent and 1.75 per cent respectively on a two-year basis, while the five-year product (60 per cent LTV) incurs a 2.12 per cent interest rate charge.

They all come with a £1,995 fee and £750 adviser cashback.

Virgin requires borrowers to have a minimum personal income of £25,000 a year. 

The rental income must cover 145 per cent of the mortgage interest calculated on a notional level of 5.5 per cent, with the exception of five-year fixed rates, which will be calculated at 5.24 per cent.

Those remortgaging a buy-to-let property without additional borrowing will need a rental income of 125 per cent of the mortgage, calculated at a stress test interest rate of 5.99 per cent.

Kusal Ariyawansa, Chartered financial planner at Appleton Gerrard Private Wealth, said: "These are positive steps to counter the issues that arise due to the withdrawal of interest relief. 

“The high arrangement fee is doused by the offer of cash back. Other buy-to-let lenders should also consider similar offerings as the impact of taxation will deem many buy-to-let outcomes meaningless."

carmen.reichman@ft.com