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Virgin launches 5-year fixed rate at 3.95%

ended 08. February 2023

Virgin, from today, has gone sub-4% on 5-year fixes, at 3.95%. Importantly, it is also offering a 3.99% 5-year fix for purchases. Free PR platform, Newspage, sought the views of brokers (below).

9 responses from the Newspage community

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Craig Fish
Director at Lodestone Mortgages & Protection
This rate war just keeps on giving. When HSBC announced its market-leading 5-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
A big physiological barrier has been broken with Virgin being one of the first lenders to price sub-4% on a 5-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.
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Justin Moy
Managing Director at EHF Mortgages
This is exactly what the market needs, namely more lenders offering sub-4% options for clients. More banks offering these kinds of deals will only help bring more affordable deals to us all. This may be one small step for lenders, but it's one giant step for borrowers.
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Katy Eatenton
Mortgage & Protection Specialist at Lifetime Wealth Management
This is a sign of things to come. First HSBC, now Virgin, and Nationwide are dropping rates by up to 0.75% today. Exciting times lie ahead for those that can stomach the wait.
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Gindy Mathoon
Senior Mortgage Broker at Create Finance
What a day. No one can predict the future and the rate decreases are going against what ecomomists predicted in October. If I was a borrower I'd be looking to reserve these funds as we just don't know what is going to happen in this volatile market.
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Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
The price war for 5-year fixes is now in full swing. It’s like the lenders know something the Bank of England doesn’t. Despite 2-year fixes remaining high, lenders seem to be reducing rates all the time for five year fixes. This is because they can foresee the rate slashes coming during that period and know they will still make a profit with a lower fixed rate. Maybe that means it’s time for a tracker?
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David Conway
Director at Clayhall Financial Services Ltd
This should come as no surprise as banks' confidence in the recovery has grown. Any downturn is now expected to be shallower and shorter than previously thought and thus far this is holding up. Expectations of 5% base rate are all but gone and SONIA rates (the bank trading price for money) are 3.5% for 5 years and 3.95% for 2, suggesting there is a margin for these to fall further. As buyers feel this confidence, we may see a housing market recovery. For now, it’s flat but the signs look good.
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Ashley Thomas
Director at Magni Finance
Rates are coming down rapidly, and I wouldn’t be surprised to see them at 3.5% or lower in the coming weeks. It is a welcome change in light of the large increases we saw during the closing stages of 2022.
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Sofia Jones
Mortgage & Insurance Adviser at Penny House
The start of 2023 has seen a larger number of enquiries from first-time buyers. The news of Virgin breaking the 4% barrier will be very welcome news to them, with a 5-year fixed at 3.95% for purchases coming the day after HSBC released their 3.99% 5-year fixed for remortgage only. The mortgage market and specifically fixed rates are gaining stability and we may now see more mortgages on fixed rates as opposed to the higher number of trackers that have been recommended recently.