Virgin Money announces rate hikes

Group is latest lender to raise mortgage costs following similar announcements by rival banks in recent weeks.

Virgin Money announces rate hikes

Virgin Money has announced increases to all its residential and buy-to-let (BTL) fixed rate products.

The group said on Monday that all residential fixed rates would increase by between 0.10% and 0.25%, and all BTL fixed rates by up to 0.27%.

In addition, the group said it would withdraw its 75% loan-to-value (LTV) five-year fixed rate at 1.70% with a £995 fee.

The announcement comes two weeks after the company released its trading update results, showing that its market share in mortgages decreased slightly by 0.5% to £57.8 billion in the last quarter of 2021.

Read more: Mortgage professionals reflect on BOE rate hike

According to industry reports, the group said it would be more “selective” in its mortgage lending to ensure returns, after admitting that it would accept lower profit margins on its home loan products in the face of stiffer competition in the mortgage sector.

The group also said it would continue investing in technology in order to maintain its market share in the medium term.

Virgin Money is the latest lender to raise interest rates. Last week, Nationwide Building Society announced its intention to increase both its base mortgage rate (BMR) and standard mortgage rate (SMR) in the wake of the Bank of England’s decision to double its base rate to 0.5%.

As from March 01, Nationwide will introduce higher rates of 2.50% for its BMR, and 3.99% for its SMR product. For Nationwide borrowers with a tracker mortgage their rate rise will reflect the BoE’s 0.25% increase.

Other lenders have followed the same route, including the Principality Building Society, which announced it will increase rates on March 01 by 0.25% for existing account holders of its variable rate savings products.

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Santander also announced that from the beginning of March, it will raise its standard variable rate by 0.25% to 4.74% and that it will be increasing its Follow-on Rate (FoR) to 3.75% for existing borrowers, along with all its tracker mortgage products which are linked to the base rate.

Read this article for more rates of Santander Mortgage products for First time buyers, remortgage, and moving home.

Platform, the mortgage arm of the Co-operative Bank, held back from increasing rates but said it would be reviewing its standard variable rate, which is currently at 4.49%.

Halifax said it would be writing to customers with mortgages affected by the Bank of England’s rate change and inform them of their new monthly payment.