Virgin Money resumes 90% LTV mortgages for first-time buyers

Virgin Money resumes 90% LTV mortgages for first-time buyers
Credit: Colin McPherson/Bloomberg

Virgin Money has returned to low deposit lending with a range of 90 per cent LTV mortgages for first-time buyers.

The lender has launched seven- and 10-year fixed-rate products, which it said offered “stability in an ongoing uncertain market”.

Seven-year fixed rates are available at 2.99 per cent and 3.09 per cent, with the former carrying a £995 fee.

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Alternatively, 10-year fixed rates are available at 3.09 per cent and 3.19 per cent, with the former also carrying a £995 fee.

Loans are available for up to 25 years on properties valued at a maximum of £400,000. Flats, maisonettes and new-builds are not eligible.

The lender was one of several in June that withdrew its 90 per cent LTV products to “protect the service for existing applications”, after a strong increase in demand.

Sarah Green, head of intermediaries at Virgin Money said: “We recognise how challenging the last few months have been for all buyers, including those trying to get onto the property ladder.

“By offering longer term fixed rates... we are giving new borrowers an opportunity to lock their rate in for the medium to longer term, safe from immediate market fluctuations.”

But Alex Kemp, partner at Ideal Mortgage Advisers, said: “Whilst it’s certainly welcomed that another lender has entered the market at 90 per cent, we feel that very few, if any, first-time buyers would be interested in taking out a seven – 10 year fixed rate.

“Most like the flexibility of two – three years, so that they can reassess their finances, or hope to achieve a better loan to value after a couple of years and remortgage to lower rates.”

Mr Kemp also said “very few” first-time buyers opted for a 25-year term.

The maximum term parallels that of Nationwide, which has also implemented a term of up to 25 years on lending over 85 per cent LTV.

With Virgin Money setting the maximum property value at £400,000, Mr Kemp said it was one of several lenders to offer mortgages at 90 per cent LTV, while trying to “rule out” properties in London and the South East, where prices are higher.

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