"Lower swap rates last week and a rush for early market share have created a price war"
Virgin Money has launched new five-year fixed rate mortgages below 4% and reintroduced its 95% LTV range.
A five-year fixed rate purchase product is available from 3.99% at 65% LTV with a £1,495 fee, while an intermediary exclusive remortgage product starts at 3.95% with a £995 fee.
Yesterday, HSBC launched the first sub-4% mortgage product since since early October.
Alongside the lower rates, Virgin has reintroduced 95% LTV products, with a five-year rate at 5.09% and a 10-year fix at 5.59%, both fee-free.
Elsewhere in Virgin's range, 75-90% LTV five-year fixed rates with a £995 fee and £1,000 cashback will be reduced by up to 0.12%, available from 4.22%.
Richard Walker, head of intermediary sales at Virgin, said: “Many borrowers, including first-time buyers, are looking for a longer term product which guarantees a fixed rate and a consistent payment for the term of the product. These new five and 10-year fixed rates at 95% LTV offer exactly that, and mean more aspiring home owners can get their foot on the housing ladder and get the keys to their first property. We’ve also refreshed our range of intermediary exclusives, including competitive five-year fixed rates starting from 3.95%, as we continue to support many types of customers with their mortgage needs.”
Craig Fish, director at Lodestone Mortgages & Protection, commented: "This rate war just keeps on giving. When HSBC announced its market-leading five-year fixed rate on Tuesday we all knew it wouldn't be long before another lender would enter the ring and Virgin stepped up. Crucially, the offer from Virgin goes not one but two steps further. Not only does their remortgage rate beat HSBC in terms of rate and fee it also offers cashback, and better still they have a sub-4% offering for people purchasing who are lucky enough to have a 40% deposit. Admittedly these products are still only available to those with a chunk of equity or cash, but it's all heading in the right direction. I believe that by the spring, the market is going to be alive with great offers 'springing' up like daffodils, so those mortgaging now should, subject to circumstances, hold off on fixing as better rates almost certainly lie ahead."
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Lea Karasavvas, managing director at Prolific Mortgage Finance, added: "A big physiological barrier has been broken with Virgin being one of the first lenders to price sub-4% on a five-year fixed rate today for a purchase deal. Lower swap rates last week and a rush for early market share have created a price war, which has benefited borrowers and may well have installed much needed confidence in the market. Virgin have demonstrated since the start of the year a desire to lend, leading the pack on pricing, and have gone one step further by breaking the 4% barrier. As the competition heats up, this benchmark may well create a ripple effect causing more lenders to join them in the chase for market share."
