Virgin Money’s Fix and Switch mortgage range has been claimed to be “one for the records” by brokers, with borrowers being able switch to a new product after two years.
Virgin Money claimed its Fixed and Switch mortgage is “unique” to the lender, stating “you won’t find a five-year fixed, with a two-year ERC, from any other provider”.
The Fix and Switch product is a five-year fixed rate mortgage “with a difference” as its early repayment charge only lasts until the end of year two and, after that, there’s no ERC if someone wants to switch.
This means customers get a five-year protection against rates going up but, if rates go down, they can switch to another deal after two years.
John Charcol mortgage technical manager, Nicholas Mendes, welcomed the new range saying “lenders typically compete on price and criteria but this deal is a hybrid of both”.
He added: “Fixed rates are expected to reduce over the next few years, but nothing is certain especially when we consider the global uncertainty.
“Clients want stability but tend to opt for a 2-year fixed as no one wants to be tied into a higher rate for longer than necessary.
“Having a 5-year fixed with no early repayment charges after two is a welcomed move and another demonstration of how lenders are actively working in ways to attract new business.”
Mendes was not the only one to express positivity as Our Mortgage Broker Limited director, Akhil Mair, described the announcement as a “beacon of progress”.
He added: “It’s a testament to Virgin Money’s dedication to empowering homeowners and reshaping the mortgage landscape for the better”.
Additionally, Trinity Finance adviser, Amit Patel, said the product was a “game changer” and a “bold and innovative move”.
Patel also stated it would be of “real benefit” to borrowers who want surety of a long term fix but have the flexibility to switch in two years without having to incur a penalty.
“It will be interesting to see if other lenders bring out a similar proposition,” he added.
Meanwhile, J Finance Ltd managing director, Rowan Frayling, celebrated the innovation of the announcement, stating: “Virgin should be praised for bringing some product innovation into the market rather than just rate wars.
“This is an interesting option for the right client and something that should grab attention”.
Thanks to the Newspage community for sharing their thoughts with FT Adviser.
tom.dunstan@ft.com
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