Remortgaging From Virgin Money

Why Do Borrowers Leave Virgin Money?

Virgin Money mortgage holders choose to remortgage to a different lender for a range of reasons:

• SVR costs — At around 7.49%, the Virgin Money standard variable rate adds a significant premium to your monthly payments compared to fixing with a new lender. For many borrowers, this is the primary motivation to switch.
• Ownership changes — The acquisition by Nationwide Building Society has led to uncertainty among some customers about the future direction of the Virgin Money mortgage brand, its product range, and its service model. Some borrowers prefer to take control by actively choosing their next lender.
• Product availability — Virgin Money's mortgage range has shifted over time, and the products available to existing customers through product transfers may not be as competitive or varied as those available from the wider market.
• Offset mortgage limitations — While Virgin Money was known for its offset mortgage products, not all borrowers find the offset structure beneficial, particularly if they do not maintain substantial savings balances. Switching to a standard repayment mortgage with a lower rate may provide better value.
• Improved personal circumstances — If your income has increased or your property value has risen since you first took out your Virgin Money mortgage, you may now qualify for significantly better rates elsewhere.

Whatever your reason, the process of remortgaging from Virgin Money is well established and typically takes four to eight weeks once you submit your application.

Virgin Money SVR and the Cost of Staying

Virgin Money's standard variable rate is currently around 7.49%. This is the default rate your mortgage reverts to when your fixed, tracker, or discount deal period expires. Understanding the cost implications of remaining on this rate is crucial:

Consider a £220,000 repayment mortgage over 25 years:

• At 7.49% (Virgin Money SVR) — monthly repayments of approximately £1,629
• At 4.50% (competitive fixed rate) — monthly repayments of approximately £1,222
• Potential monthly saving — around £407 per month, or nearly £4,880 per year

With Virgin Money now part of the Nationwide group, there has been some speculation about whether the SVR and product range will align more closely with Nationwide's own offerings over time. However, until any such changes are confirmed, existing Virgin Money customers should base their decisions on current rates and available products.

If you held an offset mortgage with Virgin Money and have been using the offset facility, bear in mind that your effective rate may have been lower than the headline SVR, depending on the balance in your linked savings account. Factor this into your comparison when looking at alternative deals.

How to Switch Your Mortgage From Virgin Money

Remortgaging away from Virgin Money follows the standard UK remortgage process:

• Confirm your current position — Check your Virgin Money mortgage account for your outstanding balance, current interest rate, any early repayment charges, and the end date of your deal. If you have an offset mortgage, note the balance in your linked savings account as well.
• Evaluate your equity — Determine how much equity you have in your property by comparing its current market value against your outstanding mortgage balance. Higher equity means a lower LTV ratio and access to better rates.
• Search the market — Compare deals from across the market using a broker or comparison service. Pay particular attention to the total cost of each deal, including arrangement fees, not just the headline rate.
• Make your application — Once you have chosen a deal, submit your application to the new lender. They will carry out credit checks, verify your income, and arrange a property valuation.
• Complete the transfer — A solicitor will manage the legal process of redeeming your Virgin Money mortgage and setting up the new one. Many remortgage deals include free legal work and a free property valuation.

If you currently have a Virgin Money offset mortgage, speak to your broker about whether an offset deal with another lender might suit you, or whether switching to a standard repayment mortgage at a lower rate would be more cost-effective.

Important Checks Before Leaving Virgin Money

Before committing to a remortgage away from Virgin Money, consider these factors:

• Early repayment charges — Virgin Money applies ERCs during the initial deal period. The charge is typically a percentage of the outstanding balance and varies depending on how far through the deal you are. Leaving during the ERC period could still be worthwhile, but only if the savings from a lower rate exceed the charge over your new deal period.
• Offset account balances — If you have a Virgin Money offset mortgage, you will need to decide what to do with the savings held in your linked offset account. These funds will be released when the mortgage is redeemed and can be moved to a new savings account or used for other purposes.
• Nationwide integration — As Virgin Money integrates with Nationwide, it is possible that new products or improved rates may become available to existing customers. However, there is no guarantee of this, and waiting for potential future improvements carries the risk of paying the SVR in the meantime.
• Virgin Money rewards or loyalty benefits — Check whether you receive any cashback, rewards, or loyalty benefits linked to your Virgin Money mortgage that would be lost by switching.
• Mortgage insurance — Review any mortgage protection or buildings insurance policies taken out through Virgin Money to ensure you have appropriate cover with your new lender.

Why a Broker Is Valuable When Leaving Virgin Money

A mortgage broker can add significant value when you are remortgaging from Virgin Money, particularly given the brand's recent ownership changes:

• Navigating ownership changes — With Virgin Money now part of Nationwide Building Society, the product landscape may be in flux. A broker stays up to date with these changes and can advise whether any new products or deals have been introduced that might benefit you.
• Offset mortgage expertise — If you currently hold a Virgin Money offset mortgage, a broker can help you understand whether retaining an offset structure with a different lender makes sense, or whether switching to a standard mortgage at a lower rate would save you more overall.
• Whole-of-market access — A broker can compare Virgin Money's product transfer rates against thousands of deals from other lenders, ensuring you see the full picture before making a decision.
• Fee analysis — Some of the best headline rates come with substantial arrangement fees. A broker can calculate the true cost of each option over the deal period, ensuring you choose the deal that genuinely saves you the most money.

Broker services are typically free for remortgage customers, as the commission is paid by the new lender. This makes professional advice an easy decision for most borrowers.