Virgin Money has introduced further increases across its 2-year and 5-year fixed rate products, effective from 8pm tonight, Tuesday 5th March.
As part of the lender’s purchase exclusive range, its 90% loan-to-value (LTV) 5-year fixed rate fee-saver will be increased by 0.05%.
In addition, within its remortgage exclusive range, Virgin’s 70% LTV 5-year fix and switch with £1,495 fee will be increased by 0.06% to 4.85%.
Its 70% LTV 5-year fix and switch fee-saver will be increased by 0.07% to 5.16%, while its 85% and 90% LTV 2- and 5-year Professional fixed rate fee savers will be increased by 0.18%, starting from 4.90%.
A spokesperson from Virgin Money said: “We aim to provide our intermediary partners with as much notice as possible when making changes to our mortgage products.
“Applications submitted before the 8pm deadline will be honoured and processed as usual.”
Reaction:
Andrew Montlake, managing director at Coreco:
“It is a sorry state of affairs when lenders feel the need to increase rates twice within a short space of time, and illuminates some of the systemic issues in the mortgage market and the pent-up demand of potential buyers and mortgage borrowers.
“Whilst for some lenders it is about wafer-thin margins on products, for others they are not able to remain too competitive for even a small amount of time, as they feel unable to deal with the amount of applications coming through the door without service suffering unduly.
“Swap rates have become more volatile of late, perhaps due to an air of nervousness over what the Chancellor will do in the budget given the feeling that the Conservatives are in the last chance saloon, and no lender wants to be caught out by a sudden reactionary change in the markets.
“Indeed the Chancellor is on very uncertain ground, and cautious optimism, with well thought through policies, should be the flavour of the budget rather than a Truss-like kitchen sink approach.”
Elliott Culley, director at Switch Mortgage Finance:
“No big swings in the market but Virgin are running away.
“Two rate increases in a week and hardly any time given to speak to clients about rate changes that can affect their monthly outgoing for potentially five years.
“Rate increases are understandable but with no tangible reason it is very frustrating.”
Scott Taylor-Barr, principal adviser at Barnsdale Financial Management:
“Two rates changes close together is bad enough, but then to only move some rates by as little 0.05%?
“How many hours of work is this creating, for both brokers and the lender, for such a tiny change?
“To make matters worse, this change was announced at 2pm today, so we get a whole three working hours (with the Bank closing at 5pm, but their LiveChat ending service at 4pm).
“Not to worry though, their online system will continue to allow us to submit business until 8pm tonight; because brokers don’t have social lives or families. Thanks Virgin.”
Justin Moy, managing director at EHF Mortgages:
“Yet again more reaction to the creeping increase in swap rates.
“This time Virgin Money have pushed rates up twice in just a few days. Most increases are small and not worth worrying about, but this suggests that lenders’ margins are equally as tight and delicately priced.
“The government hopefully have some huge rabbit to pull out of a hat this week to help mortgage borrowers, as a penny off income tax will do nothing to mitigate an increase in mortgage rates, especially when so much ground had been made in January.”
Lewis Shaw, owner and mortgage expert at Shaw Financial Services:
“This is at least the fourth lender today to tell us they’re increasing mortgage rates.
“Let’s hope that Jeremy Hunt doesn’t do anything silly tomorrow and send us back to September 2022 when Liz Truss put a bomb under mortgage rates and, by extension, the property market.”
Ranald Mitchell, director at Charwin Private Clients:
“Virgin are the latest high profile lender to push rates up, and for the second time within a week.
“This type of rate volatility causes big problems for consumers and brokers, scrambling to get applications in to secure products before very tight deadlines.
“Mortgage industry sentiment is tense at the moment, and Virgin isn’t doing anything to help.”
Katy Eatenton, mortgage and protection specialist at Lifetime Wealth Management:
“It’s bad enough they have increased rates twice in one week, but again, they give notice at 2pm.
“Although they allow you to key applications until 8pm, brokers now need to work into the evening to submit mortgage applications.”
Darryl Dhoffer, adviser at The Mortgage Expert:
“Utter carnage. We seem to be heading for that point where you are on hold with a lender to secure a new deal that has just changed, have been in the queue for a few hours to secure said deal, and then have the lender increase the rate again while you are on hold.
“Maybe some of the profits these lenders have made can be utilised in a better IT or phone system, to eliminate these delays in securing products, or to pay for extra staff for the night shift crews, that may be needed by brokers, when product cut-off times are that evening!”
Rohit Kohli, director at The Mortgage Stop:
“Not only have Virgin increased rates for the second time in the space of a week but they have again mounted pressure on borrowers to make snap decisions with short notice product changes.
“It is worrying when a lender has to reprice so quickly as it raises questions on their decision making – especially when market movements are limited ahead of the budget tomorrow.”
Graham Cox, founder at Self Employed Mortgage Hub:
“Virgin, like all lenders, are reacting to the relentless, almost daily rise in swap rates over the past few weeks, as the expectation in the money markets about an early base rate cut disappears over the horizon.
“The next Bank of England MPC meeting to discuss inflation on March 21st will be hugely important for sentiment.
“Some good news there, and perhaps mortgage rates will start falling again.”
Ben Perks, managing director at Orchard Financial Advisers:
“Virgin are the latest to join what’s becoming a long queue of lenders hiking rates.
“Whist swap rates have increased slightly, it’s not been dramatic and would not usually spark such a reaction from so many lenders.
“Hopefully this is media posturing and tactical planning ahead of Jeremy’s big day tomorrow.”
