Virgin Money extends 90 per cent LTV availability and tightens LTI
The bank came back into the 90 per cent LTV space in December with a five-year fix before adding more options this year.
The two, five, seven and ten-year fixes are no longer restricted to first-time buyers and the maximum property value Virgin will lend on has increased to £500,000.
Additionally, maximum mortgage terms at this tier have been extended from 25 to 30 years. Virgin Money will not lend to flats, maisonettes or new-build properties at 90 per cent LTV.
Virgin Money has also made significant changes to its affordability criteria.
The lender has tightened its loan to income (LTI) cap for all lending above 80 per cent LTV, reducing it to 4.49 times income.
However, this excludes remortgage applications with no additional lending, and its existing loan-to-income cap of 4.49 times income where the LTV is more than 85 per cent remains in place.
At the same time, it will increase the maximum LTI for all interest-only and part-and-part applications to 4.49x.
And in addition to basic pay, 100 per cent of pension and allowable benefit income will be used in the LTI calculation.
The changes come into effect on 4 March and follow revisions of Clydesdale Bank’s loan to income cap on self-employed applicants.
Virgin and Clydesdale combine restructured BDM teams and add 90 per cent LTV deals
The move is part of the integration of the lenders under the Virgin Money brand after their merger in 2019.
The lenders said there had been some territory changes and admitted the team size had remained “largely unchanged” but did not give details of how many BDM positions had been affected or how big the team is now.
The new team will offer brokers support and advice across the full range of products and services including residential and buy-to-let mortgages at both banks.
“The key difference is that every BDM is able to support with both brands, so some brokers will already have a good relationship with their BDM as they dealt with them previously on a single brand,” a spokesman told Mortgage Solutions.
“In many occurrences, the broker will benefit from having more support as they will get a field and a telephony BDM supporting on both products rather just one previously.”
Sarah Green, head of mortgage distribution and general insurance at Virgin Money (pictured), added: “This is another important step in our journey to combine Virgin Money and Clydesdale Bank.
“The new team have a combined wealth of experience and will help brokers find the right product for their customers.
“As well as having access to a full range of Virgin Money and Clydesdale Bank products, brokers will be able to chat directly to their BDM about complex cases which may require a more flexible and bespoke approach to underwriting complex cases, something which Clydesdale Bank is widely known for.”
New products for professionals
Clydesdale Bank has also made changes to its product offering – cutting rates and introducing a pair of 90 per cent loan to value (LTV) deals for professionals.
The new 90 per cent LTV professional deals are available for purchase and remortgage, up to a maximum loan size of £750,000 in London and £450,000 throughout the rest of the UK, with a maximum term of 30 years.
These deals are not available for flats or maisonettes and new build purchases.
The two-year fix is at 3.44 per cent and the five-year version at 3.64 per cent.
Seven other products have seen interest rates cut by 10 basis points (bps), including the two-year fixed fee offer deal at 85 per cent LTV which is now at 2.89 per cent.
The reciprocal options for professionals and newly qualified professionals have also been reduced to 2.85 per cent and 3.05 per cent respectively.
Green added: “We’ve reduced rates across our Clydesdale Bank mortgages. We keep our rates under review and these latest changes demonstrate our support for first time buyers as well as anyone looking to move house or remortgage.”
Halifax and Virgin Money cut high LTV and shared ownership mortgage rates
The lender has made reductions to two and five-year fixed rate products across the 75 per cent and 90 per cent LTVs.
This includes the two-year 75 per cent LTV deal with £999 fee at 1.31 per cent and the 90 per cent LTV equivalent which is at 3.09 per cent. The five-year versions are at 1.66 per cent and 3.41 per cent respectively.
Selected rate reductions have also been made on three-year fixed rate products across the 75 per cent and 85 per cent LTV ranges.
Here the 75 per cent LTV zero fee deal is at 1.84, while the 85 per cent LTV option with £999 fee is at 2.69 per cent.
In the new build range, the two-year fix at 75 per cent LTV with £999 fee is at 1.51 per cent and the five year version up to 85 per cent LTV is at 3.03 per cent.
Meanwhile, Virgin Money is cutting rates on some of its products by up to 31 basis points, including a pair of broker exclusives and shared ownership mortgages.
The broker exclusives with £1,000 cashback and £995 fee at 75 per cent and 85 per cent LTV for purchases have been reduced to 1.74 per cent and 2.69 per cent respectively.
Rate reductions across its core range include the 65 per cent LTV five-year fixed cut by 31 basis points to 1.68 per cent and the first-time buyer 90 per cent LTV five-year zero fee mortgage trimmed by seven basis points to 3.62 per cent.
Shared ownership deals see two of the biggest reductions.
The 90 per cent LTV five-year fixes with £995 fee and £0 fee have been reduced by 27bps and 31bps to 3.59 per cent and 3.78 per cent respectively.
Monmouthshire Building Society
Monmouthshire Building Society also introduced a range of five-year fixed deals at up to 80 per cent LTV, with purchase and remortgage options available.
Interest rates range from 1.5 per cent at 50 per cent LTV to 2.25 per cent at 80 per cent LTV, with a minimum loan size of £40,000 and maximum loan size of £1m.
Virgin adds limited 90 per cent LTVs; Dudley BS launches fee assisted remortgages – round-up
New products include two five-year fixed mortgages at 75 and 85 per cent LTV with respective rates of 1.79 per cent and 2.79 per cent. Both come with £1,000 cashback and are for purchases only.
There is also a two-year fixed 90 per cent LTV mortgage for first-time buyers with a rate of 3.29 per cent with cashback increased to £1,000.
These products will be available for a two-week period only.
Two permanent 90 per cent LTV mortgages which were previously exclusive to intermediaries have been introduced to its core range.
Both products have fixed rates for two years and £500 cashback. The £995 option has a rate of 3.29 per cent and the fee-free alternative is set at 3.39 per cent.
The bank has also made rate reductions of up to 0.40 per cent including its fee-free 90 per cent LTV shared ownership deal, which is fixed for five years. The rate for this product has been reduced by 40 basis points to 4.09 per cent.
Elsewhere, a two-year fixed mortgage at 85 per cent LTV with a £995 fee has been cut to 2.69 per cent from 2.79 per cent.
Changes to the range are effective from tomorrow.
Dudley BS launches fee assisted remortgage deals
Dudley Building Society has launched three fee assisted remortgage products at 75 and 85 per cent loan to value (LTV).
The products come with free standard valuation, free legals and a fixed £499 administration fee.
They include a three-year fixed deal at 85 per cent LTV at 3.84 per cent and a two-year fixed product at the same tier with a discounted rate of 3.79 per cent.
There is also an interest-only deal which is discounted at 3.94 per cent for the term of the mortgage at 75 per cent LTV.
Sam Ward, commercial director at Dudley Building Society, said: “We are delighted to announce the launch of a range of fees assisted remortgage products.
“December was the biggest month for mortgage maturities in 2020, with almost 170,000 accounts reaching the end of existing deals, according to data from CACI.”
“We recognise now more than ever, how important it is to support broker customers by providing product options which suit their needs during this challenging time,” she added.
Virgin mortgages to be ‘selective and priced carefully’ as outlook remains ‘uncertain’
The lender reported a mortgage balance of £58.2bn to the first quarter of its financial year to the end of December, which is down 0.2 per cent.
The group said it had focused on margin management as well as underwriting standards as a result of the “uncertain” economic outlook.
Over the coming months the removal of the stamp duty holiday may see volume slow, Virgin said in a results statement. The lender added that it will continue to be “selective, focusing on balancing volumes and pricing carefully”.
At the same time, Virgin set aside £726m for loan losses but returned to statutory profit in the first quarter of the year.
The proportion of Virgin customers needing further support after ending mortgage payment holidays has “increased modestly” and is within the level assumed by provisions, according to the lender.
Customers have been granted £12.1bn of mortgage payment holidays to the end of December 2020.
Within the matured holidays 98 per cent have returned to payment, Virgin reported.
As part of a digital drive within the group, Virgin acknowledged the launch of APIs for mortgage intermediaries.
At the end of last year, the lender announced its integration with Twenty7Tec.
Chief executive David Duffy said: “We have made a good start to the year with the launch of new customer propositions, further roll-out of our rebrand programme and a return to statutory profit, while maintaining a disciplined approach. The group remains strongly capitalised and we have good momentum as we look out into the remainder of the year.
“Given the current UK-wide restrictions and ongoing uncertainty, we maintain the cautious economic outlook we outlined in November and our full year guidance remains broadly unchanged.
“Looking ahead, the vaccine roll-out and EU trade deal are encouraging for the UK’s economic recovery and we remain focused on disrupting the market through a variety of innovative new products and propositions with a customer and brand experience that is the best in the market.”
Virgin Money cuts high LTV rates
The lender has made the cuts to selected products at 85 per cent and 90 per cent LTV.
The largest reductions have been made to a pair of 90 per cent LTV first-time buyer deals in its broker exclusive range.
The two-year fixes with £995 fee and no fee have been reduced by 0.15 per cent and 0.2 per cent respectively to 3.29 per cent and 3.49 per cent each.
A core five-year fix for first-timers at 90 per cent LTV with a £995 fee has also been trimmed by 0.03 per cent to 3.46 per cent.
Meanwhile, four of its core residential range at 85 per cent LTV have been reduced.
The two-year fixes with £995 fee and zero fee are down by 0.04 per cent and 0.07 per cent to 2.79 per cent and 3.06 per cent respectively.
And the three-year and five-year fee free deals are both reduced by 0.13 per cent to 3.16 per cent.
Brokers expect their jobs to become more challenging in 2021 – research
Nearly all mortgage brokers feel the pandemic is having an impact on their business, the research by Virgin Money found.
More than three quarters of brokers expect a change to their role over the coming year, of these, almost four fifths think it will become more demanding with customers needing guidance.
Almost eight in 10 believe it will become more complex with market and customer needs changing.
More than half of brokers surveyed would like to see improvements to their experience when working with a lender in the form of removal of data entry duplication throughout the journey, as well as better options that allow them to manage their clients’ existing mortgages.
A similar proportion would like to see product improvements from lenders such as bespoke underwriting options and more innovative products.
There is anticipation among brokers that there will be further change from the pandemic- and impact – in the year ahead.
The main drivers were identified as increased unemployment as a result of Covid-19, house price uncertainty, but also improved first-time buyer incentive schemes.
Other drivers of change predicted include expected restrictions to lenders’ criteria and the end of the current stamp duty holiday.
Sarah Green, head of mortgage distribution and general insurance at Virgin Money (pictured), said: “The research clearly shows that brokers have found it challenging to keep up to date with fast changing market conditions and customer needs. As well as navigating uncertainty amongst clients and changes to products, they are also contending with what the future of the mortgage market will look like when furlough and the stamp duty holiday ends.”
Virgin recently revealed a partnership with Twenty7Tec to help reduce rekeying and make applications faster for brokers.
Green added: “We aim to be the best partner we can be as the UK navigates through the economic recovery from Covid-19.”
Clydesdale Bank makes stamp duty commitment as Virgin reduces rates
The bank has said if brokers submit a fully packaged purchased application by 15 January, it will issue an offer by 29 January or give the customer £200 if it fails to do so.
This is in an aim to give customers enough time to complete their case before the 31 March deadline, as purchases typically complete eight weeks after a mortgage offer has been issued.
The bank has also reduced valuation fees as of 11 December, starting at £124 for properties with a value of up to £100,000.
Virgin reduces mortgage rates
Virgin Money has cuts rates on a number of mortgages up to 90 per cent loan to value (LTV).
The five-year fixed fee-free mortgage at 85 per cent LTV has seen the largest reduction of 43 basis points to 3.36 per cent.
Elsewhere, the five-year fixed mortgage 75 per cent LTV with a £995 fee has been reduced by 0.25 per cent to 1.88 per cent, while the two-year fix at the same tier has been cut to 2.23 per cent from 2.53 per cent.
Additionally, the shared ownership two-year fixed mortgage at 90 per cent LTV has been reduced to 3.29 per cent, a cut of 10 basis points.
Virgin Money has also changed the incentives on its products with the removal of free valuations and the introduction of £500 cashback on some products.
These changes are effective from today.
Virgin Money launches faster API-driven mortgage applications with MAB and Connells
The partnership will streamline the search and application process for intermediaries by removing the need to re-key data in multiple places.
Users can apply for a Decision in Principle from Virgin via this integration and submit a full mortgage application and payments without needing to visit the Virgin Money portal.
Available across residential and buy to let, for both purchase and remortgage customers, the technology will be rolled out to the wider market in early 2021.
Simon Wallace, head of mortgage integration and transformation at Virgin Money said: “At Virgin Money we have made no secret of our ambition to drive change and innovation in the mortgage market. This exciting partnership with Twenty7tec will play a key part in achieving that goal.
“The Apply platform will make it even easier for intermediaries to submit cases to us, saving them precious time, which could be better spent on helping their next client.”
James Tucker, CEO of Twenty7Tec, said: “Virgin Money has a great track record for innovating in the mortgage market and playing a huge role in delivering better customer service, so we’re over the moon to help them with this integration. As a result of this deal, Virgin Money Customers will experience a seamless experience from beginning to end – something which the Virgin brand is so closely allied with. We’re proud to be their partner in making the mortgage experience a little better for everyone involved.”
Ben Thompson, deputy CEO of MAB added: “This is a really progressive step, that we thoroughly welcome. Simplification of the mortgage process is very much needed, even more so in the current environment.”
Adrian Scott, group mortgage services director of Connells said it’s great to see another lender go live with the Apply system. “This will make writing business with Virgin Money far more efficient, which is always an attractive proposition for any broker, but particularly at this time when the market is so busy,” he added.
TSB adds 90 per cent deal and Virgin cuts rates – round-up
The product has a rate of 3.79 per cent, offers £500 cashback and will be available from tomorrow.
This is the first mortgage up to 90 per cent LTV the bank has offered to new borrowers since September when it launched a one-day tranche to first-time buyers.
Nick Smith, head of mortgages at TSB said: “We know that raising a deposit is often the biggest challenge our customers face when buying their first property.
“With the continued challenging environment, we have introduced a mortgage that will provide more help for our customers to buy their first home.”
Virgin Money makes rate cuts
Virgin Money has made a series of rate reductions across its mortgages up to 90 per cent loan to value (LTV), with cuts ranging between two and 25 basis points (bps).
For shared ownership borrowers with a 10 per cent mortgage, the two-year fixed with a £995 fee has gone down by 25 bps to 3.39 per cent.
A five-year fixed residential mortgage at 65 per cent LTV with a £995 fee has been reduced by 0.16 per cent to 1.45 per cent, while the three-year fixed equivalent now has a rate of 3.09 per cent, a reduction of 15 bps.
Additionally, two Help to Buy mortgages at both 55 per cent and 75 per cent LTV have been reduced by 0.02 per cent to 2.17 per cent. Both products have a fee of £995 and are fixed for five years.
Buy-to-let mortgages have also seen cuts of up to 0.23 per cent. Rates for core and portfolio borrowers now vary between 1.87 per cent at 60 per cent LTV and 2.08 per cent at 75 per cent LTV.
The changes are effective from 27 November.