Virgin Money has stopped offering its guarantor mortgage range citing a lack of demand for the product, Mortgage Strategy can reveal.
Until today, 24 October, Virgin Money offered clients a mortgage in which a family member guarantees they will cover repayments for a first-time buyer if the buyer should become unable to do so.
A spokesman for the company tells Mortgage Strategy: “We have decided to stop offering new guarantor loans because of limited demand.”
In a news article on its own website Virgin Money explains most lenders are increasingly averse to the product: “Fewer lenders are currently offering guarantor mortgages, preferring parents to be joint borrowers on the mortgage.”
The company says the decision to stop offering the guarantor mortgage was not linked to the sale to Clydesdale and Yorkshire banks’ parent company, CYBG, which was announced earlier in October.
The deal to buy Virgin Money was worth £1.7bn and will see the merged business all eventually using the Virgin Money brand.
The combined company has over six million customers with around £70bn of customer loans, and almost £60bn of mortgage lending. Virgin Money says this is double the size of any other challenger bank.