Virgin Money increases revert-to rate for new B2L customers

Virgin Money has increased the rate new buy-to-let borrowers revert to at the end of their fixed or tracker period by 0.2 per cent. 

Today the lender launched a new range of buy-to-let mortgages and said new customers will revert to a new rate of 4.99 per cent at the end of the the end of the fixed or tracker period.

The change does not affect existing buy-to-let borrowers, who will continue to revert to 4.79 per cent, and it does not affect residential borrowers, new or old.

Virgin Money commercial director for mortgage and savings Peter Rogerson says:  “Buy-to-let is an important segment of the mortgage market, and is becoming increasingly important to Virgin Money.  These mortgages have a different risk profile from residential lending which is why many lenders have a separate revert rate from residential loans. 

“We believe this is a sensible approach, and so all our new buy-to-let mortgages will include this feature. There are no changes for existing customers.”

The new range is available through intermediaries, branches and over the phone, with rates starting from 3.38 per cent for a two-year fixed rate with a £1,995 fee.

Today, Mortgage Strategy reported West Bromwich Building Society had told 6,700 of its buy-to-let tracker customers that their rates will increase by 2 per cent on 1 December.

All of the borrowers have mortgage accounts with West Bromwich Mortgage Company, its now closed specialist lending arm, and are landlords with multiple properties.

The affected borrowers are on a variety of different rates but all will see a 2 per cent increase in December.

The building society says it has increased the trackers as a result of “market conditions” and that the change is allowed as part of the mortgage contract.

A spokesman for the building society says: “These changes, which are permitted under the terms and conditions of the accounts, are a reflection of market conditions and the need for us to carry out our business prudently, efficiently and competitively.”

West Brom’s move follows that of Bank of Ireland, which on 1 May increased its tracker mortgage rate for 13,500 borrowers. The rate rose from base rate plus 1.75 per cent to base rate plus 4.49 per cent for buy-to-let deals and base plus 2.49 per cent for residential.

From 1 October, it will rise again for residential borrowers to base plus 3.99 per cent. The bank says it is due to higher capital requirements.

However, in late May Bank of Ireland reversed its hike for 1,000 flexible accounts customers and 200 more who had switched to a tracker mortgage.