Virgin reveals new Help to Buy mortgage deals

Virgin Money has unveiled the details of its first ever Help to Buy mortgages, which are available to borrowers with a 5% or 10% deposit.

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Several weeks ahead of the original start-of-next-year, the announcement makes it the fourth lender to unveil deals under the Help to Buy mortgage guarantee scheme.

As well as to home purchasers, Virgin will also offer Help to Buy deals to those looking to stay put and remortgage their existing home.

Anthony Mooney, director of financial services at Virgin Money, said: “We want to support people’s home ownership ambitions.  Joining the Help to Buy mortgage guarantee scheme, several weeks ahead of our original plans, further strengthens our commitment to consumers in this under-served part of the market. And we are pleased to be widening the choice of products available.”

Help to Buy is a government scheme that aims to help more people get on and move up the property ladder by making more mortgages available to those with deposits of as little as 5%.

Under the terms of this part of the scheme, the government protects lenders by guaranteeing up to a further 15%. Lenders pay a fee of up to 0.9% of the loan amount to protect against any potential taxpayer losses.

Halifax, HSBC, RBS/NatWest are already signed up to the mortgage guarantee part of the scheme, while rival bank Aldermore is gearing up to present its deals on December 16.

Virgin’s surprise move has allowed it to steal the march on Aldermore, which is also planning to offer remortgages.

However, its rates are not necessarily competitive enough to beat the banks already offering Help to Buy mortgages.

Virgin’s two-year 95% deal, for example, comes with a fixed rate of 5.29%. It is fee-free, but still looks expensive compared to HSBC’s two-year, 95% deal with a rate of 4.79% and a £99 booking fee, or RBS/NatWest’s fee-free, two-year deal at 4.99%.

It’s also not as competitive as some of the mainstream 95% mortgage deals currently on offer, which have undergone improvements in their own right.

For those with a deposit of 10%, on the other hand, Virgin’s fee-free, two-year fix at 4.29% is a more attractive prospect.

Other Virgin mortgage deals announced this week include three-year fixed rates at 5.39% on 95% loan and 4.69% on 90%, as well as five-year fixed rates of 5.49% on 95% and 4.89% on 90%.

Those using the new Help to Buy deals to purchase a home – rather than remortgage an existing property – can claim £300 cashback to help with legal fees, valuation fees or the cost of moving in general.

All Help to Buy mortgages are for properties worth up to a maximum value of £600,000.

Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct

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