July 24th, 2013
Following previous rate reductions earlier this year, contractor friendly mortgage lender Virgin Money has announced further rate cuts across their residential and buy-to-let product ranges. The newly reduced product range is immediately available to both purchase and remortgage customers.
The updated range encompasses new two year fixed rate products from 2.13%, with a product fee of £995 at a loan to value ratio of 60%. The lender has also introduced a fixed rate fee saver option, which is available at 2.49% for two years.
Although these new products target those with higher deposits, Virgin Money has also announced updates to its 70 loan to value range, offering a fixed and a tracker option which are both available at 2.19% across an initial period of 2 years with an arrangement fee of £995. Fixed rate fee saver options are also available, with the rate of 2.59% over two years, or 2.74% over three years.
Those with lower deposits of 20% and 15% can also benefit from the updated range, as there is now a two year fixed option at 3.05% as part of Virgin Money’s 80% LTV offering, and those who require an 85% LTV product will have access to a two year fixed option at a rate of 3.49%. Both of these products include a £300 cashback incentive and a product fee of £995.
Contractors looking to invest in the rental sector will also benefit from the new range, as Virgin Money has made reductions across their buy to let offering. A newly reduced two year fixed rate buy to let product is now available at a rate of 2.99%, with a 2.5% product fee and a £750 cashback incentive.
Although Virgin Money is not usually among the market leading lenders in terms of their rate offering, expert opinion suggests that the new reductions may help to change this, particularly where cuts to the lender’s fee saver range are concerned.
Susan Grant, a Senior Mortgage Consultant at Contractor Mortgages Made Easy says “Virgin Money’s updated fee saver range contains some competitively priced options which are well suited to those who are looking to keep mortgage fees to a minimum. However, those with more complex remuneration strategies should pay careful attention to the fine details of the mortgage product. Though rate reductions can make a product very tempting, there is likely to be an adverse outcome later in the process if the product does not accommodate the borrower’s specific needs and requirements.”
Contractors looking into a particular product should consider whether the lender’s underwriting processes are flexible towards their income structure. A relatively new entrant to the contractor mortgage marketplace, Virgin Money recognises contracting as a stable source of income, although they currently only offer flexible underwriting for experienced contractors who can demonstrate a two year history of contracting experience. However, whilst it is true that there are other lenders in the market who can better cater for those with less contracting experience, Virgin’s new rate cuts are certainly indicative of an encouraging time for the contractor mortgage marketplace.