Virgin mortgage policies

geekhatri78

Hi,
i am wondering if anyone is aware that Virgin Money mortgage policies are so different than other lenders..

I took 5 yrs fix buy to let mortgage thinking it will save money in long run as I don’t have to pay fees and i know i have to pay for 5 yrs. but didn’t realise that it will go against me due to virgin money policy.

i did contact virgin money for further advance and i have been advised that either i have to pay early repayment charge to go new mortgage deal (fair enough as every lender has the same policy)  or i can borrow as a separate pot but has to pay around 5.5% on that additional funding - it seems virgin money is trying to take advantage as i am fixed with them for next 3 years.

while other lender offer options to get further advance as a separate pot but on of their good rates.

how fair and legal is virgin money here and how fca is allowing to make such policy?

[Deleted User]

It's very fair and legal. You can exit the mortgage with the ERC or get separate additional borrowing.

The FCA doesn't make Virgin's policies. They just take action if regulations are breached.

Edi81

I took 5 yrs fix buy to let mortgage thinking it will save money in long run as I don’t have to pay fees and i know i have to pay for 5 yrs. but didn’t realise that it will go against me due to virgin money policy

this would all have been in the terms that you signed up to. Did you not read them?

mcpitman

OP - you need to read the T's & C's of the mortgage.

This is all perfectly normal practice.

They agreed to give you "x" amount of pounds at "y" rate for 5 yrs.

Now you want to borrow "z" extra, that will have a separate deal as this wasn't known to the bank at the time they agreed the last amount and rate.

Banks have massive calculations of how much to lend to who, when and at what rate. Just because they could lend at "y" rate when you borrowed the initial amount, that doesn't mean they can (or will) at this time.

geekhatri78

Edi81 said:

I took 5 yrs fix buy to let mortgage thinking it will save money in long run as I don’t have to pay fees and i know i have to pay for 5 yrs. but didn’t realise that it will go against me due to virgin money policy

this would all have been in the terms that you signed up to. Did you not read them?

Thanks, i did that but didn’t expected that virgin money have diff policy as i had similar situation with other lender and had better rate (not the same rate but at least was that high).

geekhatri78

mcpitman said:

OP - you need to read the T's & C's of the mortgage.

This is all perfectly normal practice.

They agreed to give you "x" amount of pounds at "y" rate for 5 yrs.

Now you want to borrow "z" extra, that will have a separate deal as this wasn't known to the bank at the time they agreed the last amount and rate.

Banks have massive calculations of how much to lend to who, when and at what rate. Just because they could lend at "y" rate when you borrowed the initial amount, that doesn't mean they can (or will) at this time.

Thanks, I completely agree that borrowing “z” will not give me “y” rate but here difference is over 3.5%? And the same didn’t apply to other lenders?

mcpitman

geekhatri78 said:

mcpitman said:

OP - you need to read the T's & C's of the mortgage.

This is all perfectly normal practice.

They agreed to give you "x" amount of pounds at "y" rate for 5 yrs.

Now you want to borrow "z" extra, that will have a separate deal as this wasn't known to the bank at the time they agreed the last amount and rate.

Banks have massive calculations of how much to lend to who, when and at what rate. Just because they could lend at "y" rate when you borrowed the initial amount, that doesn't mean they can (or will) at this time.

Thanks, I completely agree that borrowing “z” will not give me “y” rate but here difference is over 3.5%? And the same didn’t apply to other lenders?

How long until the end of your fixed rate deal?
Is the ERC sliding scale (less to pay with 1 yr to run, than 4 years)?
How much is the extra borrowing?

Then you can work out the cost of changing your current deal to a low fixed rate or taking the additional borrowing temporarily at a higher rate until you can remortgage and combine to one rate at that time.

DrEskimo

geekhatri78 said:

mcpitman said:

OP - you need to read the T's & C's of the mortgage.

This is all perfectly normal practice.

They agreed to give you "x" amount of pounds at "y" rate for 5 yrs.

Now you want to borrow "z" extra, that will have a separate deal as this wasn't known to the bank at the time they agreed the last amount and rate.

Banks have massive calculations of how much to lend to who, when and at what rate. Just because they could lend at "y" rate when you borrowed the initial amount, that doesn't mean they can (or will) at this time.

Thanks, I completely agree that borrowing “z” will not give me “y” rate but here difference is over 3.5%? And the same didn’t apply to other lenders?

How do you know what other lenders would have offered in the same circumstance?

Thrugelmir

geekhatri78 said:

i did contact virgin money for further advance and i have been advised that either i have to pay early repayment charge to go new mortgage deal (fair enough as every lender has the same policy)  or i can borrow as a separate pot but has to pay around 5.5% on that additional funding - it seems virgin money is trying to take advantage as i am fixed with them for next 3 years.

Seems fairly standard policy. As in line with the contractual terms you agreed to at the outset.