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Evening Standard
Evening Standard
Jonathan Prynn

Virgin Money pushes through second round of mortgage rate hikes in days

Virgin Money has pushed through a second round of mortgage rates hikes within days in another blow to borrowers.

The lender said its range of two and year fixed rate products will go up at 8pm tonight.

The eve of Budget increases are only small, between 0.05% and 0.18%, but come hard on the heels of the last hikes.

Almost all the major lenders have increased the cost of their home loans over recent weeks as money market rates have drifted up in expectation of a more protracted struggle against inflation than previously hoped for.

Average five year rates bottomed out at 5.18% on 1 February but now stand at 5.34%, while two year rates went as low as 5.55% at the end of January but have bounced back to 5.76%, according to latest data from Moneyfacts.

A spokesperson from Virgin Money said: “We aim to provide our intermediary partners with as much notice as possible when making changes to our mortgage products.

“Applications submitted before the 8pm deadline will be honoured and processed as usual.”

Scott Taylor-Barr, principal advisor at Barnsdale Financial Management said, “Two rates changes close together is bad enough, but then to only move some rates by as little 0.05%?

“How many hours of work is this creating, for both brokers and the lender, for such a tiny change?

Justin Moy, managing director at EHF Mortgages, said, “Yet again more reaction to the creeping increase in swap rates.

“This time Virgin Money have pushed rates up twice in just a few days. Most increases are small and not worth worrying about, but this suggests that lenders’ margins are equally as tight and delicately priced.

“The government hopefully have some huge rabbit to pull out of a hat this week to help mortgage borrowers, as a penny off income tax will do nothing to mitigate an increase in mortgage rates, especially when so much ground had been made in January.”

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