Virgin rate cuts: 2-year fixed rate starting with a 4 will be "like Black Friday come early for borrowers"

Brokers have said we are edging ever closer to a 2-year fixed rate mortgage starting with a 4, following further cuts from Virgin this afternoon. The cuts come after the Bank of England held the base rate steady at 5.25% last week.

Highlights in the new product range announced by the lender include a 2-year fixed rate purchase mortgage at 5.05% with a £1295 fee up to 65% LTV (full changes, below).

According to Jamie Lennox, director at Norwich-based Dimora Mortgages: “The race to be the first mortgage lender with a 2-year fixed rate starting with a 4 has certainly heated up following the Bank of England's decision to hold the base rate last week. Time will tell who will be the first to take that leap, but it will be like Black Friday come early for borrowers when it arrives.”

Steven Hargreaves, mortgage adviser at Leeds-based The Mortgage Co, agreed: "It looks like the next round of rate cuts is starting. Once one of the major lenders reduces rates, Halifax in this case, they all tend to follow like dominos. This is great news for first-time buyers and any customers who have deals that are due to come to an end soon."

Justin Moy, managing director at Chelmsford-based EHF Mortgages, said borrowers may want to pull out the bunting as the sub-5% barrier on a 2-year fixed rate looks set to be breached imminently: “We are definitely edging towards a Black Friday fire sale, if there has ever been such a thing for mortgages. Borrowers looking to celebrate sub-5% 2-year fixed rate deals need to hang up the bunting, as it looks like it will be time to celebrate very soon.”

Ranald Mitchell, director at Norwich-based broker, Charwin Private Clients, agreed: “The bigger lenders are now slogging it out, with no prizes for second place. This kind of competition is fantastic for mortgage borrowers as lenders continue to push pricing downwards. Who is going to be the first to offer a 2-year fixed rate sub-5%? They will certainly grab the headlines when they do. It's coming.”

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