Virgin Money increased mortgages rates announcement: Expert tips for those due to remortgage

On Tuesday Virgin Money unveiled a new selection of fixed-rate mortgage offers for new property purchases, which included perks such as free valuations, but the rates reflect an increase of up to 0.26 percentage points compared to Virgin’s prior fixed rate agreements.

This follows Virgin raising rates for customers who were remortgaging their houses by up to 0.25 percentage points.

Given the most recent increase in the Bank of England base rate, some borrowers might be concerned that this indicates that the cost of mortgage borrowing is starting to rise once more.

Money.co.uk mortgage expert Claire Flynn comments:

“The news that Virgin Money has increased rates for some of its fixed-rate remortgage products in the past few days goes against the recent trend of declining mortgage rates. Some borrowers might be worried that this is a sign of mortgage borrowing costs rising again, particularly in light of the most recent Bank of England base rate increase.

“However, overall the trend towards declining mortgage rates continues. In recent weeks, some lenders have introduced fixed-rate deals below 4% so there are some lower deals out there.

“There has been a marked decline in rates for fixed mortgages over the past few months following the spike after September’s mini-budget. At present, mortgage rates are generally expected to continue declining or stabilise rather than increase. On the whole, borrowers are welcoming reduced mortgage costs compared with those they were facing a few weeks ago.

“However, rates still remain higher than in recent years which is undoubtedly a concern for many buyers in the purchasing market as well as those needing to remortgage.”

For those who are due to remortgage, Claire Flynn adds:

“For those due to remortgage in 2023 that are worried about the increased payments they face, there are a few things you can do to give yourself the best chance of getting the lowest rate possible:

Try and reduce your loan-to-value ratio so you can access better rates when you switch deals – you could do this by overpaying your mortgage if your lender allows this (normally there’s a limit) or using money from savings to increase your deposit when it’s time to remortgage
Look at remortgaging options six months before your current deal ends – this is because most mortgage deals are available for six months, so you could lock in a new rate now and switch when your current deal ends, avoiding an early repayment charge. If rates decrease before you switch deals, you can change again to a better one provided your new one hasn’t started yet.
Speak to a whole-of-market mortgage broker – it’s particularly important in the current market to get expert advice. An independent mortgage broker can compare mortgages from across the market to find the best rate for you.”