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Virgin rethinks property value and income for interest-only


Virgin Money is from 9 December restricting its interest-only products to customers with a minimum income of £100,000 in total for applicants, including bonuses, and a minimum property value of £500,000.

The minimum property value replaces the minimum loan size that it previously had of £300,000 for interest-only loans.

The lender says it still thinks interest-only is an appropriate option, but only for more experienced customers who can demonstrate confidence in repaying their loan at the end of its term through ”a clear and evidenced repayment plan”. 

So as a result the payment option will no longer be available to first-time buyers and it will no longer accept the sale of a customer’s primary residence or the use of cash ISAs as a repayment vehicle.

Other suitable repayment vehicles will continue to be accepted, subject to the usual criteria, including; investment plans, personal pension plans, endowment policies, sale of a property other than primary residence and a share portfolio.

Virgin Money director of financial services Anthony Mooney says: “We are making these changes in response to feedback from our intermediary partners, and given our experience that the vast majority of interest-only customers have higher incomes and property values.

“We remain of the view that interest-only remains an important option for more experienced borrowers who have a clear and demonstrable repayment plan and our revised policy reflects that.”

Trinity Financial product manager Aaron Strutt says he struggles to believes that most brokers would suggest a tightening of policy for interest-only mortgages.

Nonetheless he says most lenders have tightened up on their interest-only policies over the last year and Virgin Money has offered some of the best interest-only deals.

He says: ”The restrictions are better than pulling out. They obviously wanted to do something to limit the amount of interest-only mortgage they have been getting and they are now simply targetting high networth borrowers.”


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