Virgin Money launches super long 15-year fixed rate mortgage – but is it a good deal?
HOMEBUYERS wanting certainty about the mortgage rate they'll pay can now lock into a deal lasting for 15 years at Virgin Money.
The lender has launched a new range of home loans fixed over the long time period, with those coughing up a 10 per cent deposit paying an interest rate of 3.75 per cent and no fee.
For those with larger deposits of 25 per cent, there's a 2.99 per cent rate with no product fee, or a deal for the same period at a lower rate of 2.75 per cent with a £995 product fee.
The fixed mortgages are currently the only ones of their kind around, and they're available for both first-time buyers and existing homeowners.
If you end up moving home before the end of the fixed period, you can take the mortgage with you without being hit with exit charges as long as you meet certain criteria at the time of the move.
But if you decide to leave the lender early, you'll be slapped with hefty charges, which start at 8 per cent of the outstanding loan balance in the first five years.
How to get the best mortgage deal
ONCE you've got your deposit together, you can start looking for a mortgage deal.
Websites like and have mortgage sections so you can compare costs and all the banks and building societies have their offers available on their sites too.
If you're getting confused by all the deals on the market, it might be worth you speaking to a mortgage broker, who will help find the best mortgage for you.
A broker will typically cost between £300 and £400 but could help you save thousands over the course of your mortgage.
You can also get advice from a digital mortgage broker for free, like or .
have a list of top mortgage brokers that specilise in the specifics to suit your needs.
You'll also have to decide on if you want a fixed-deal where the interest your charged is the same for the length of the deal or a variable mortgage, where the amount you pay can change depending on the Bank of England Base Rate.
And David Hollingworth from London and Country Mortgages warned buyers not just to be swayed by the headline rate and to take into account product fees, which can typically be around £1,000.
He said: "It's always important to shop around and have options."
"Paying a higher rate interest rate could still work out as better overall value than paying a chunky arrangement fees."
It then drops to 7 per cent between year six and year ten, to 5 per cent in year's 11 and 12, to 3 per cent in year 13, to 2 per cent in year 14, and then finally to 1 per cent in the final year before the deal ends.
The rates are higher than other top fixed rate mortgages with a 10 per cent deposit as Yorkshire Building Society is currently offering rates of 1.79, 2.21, and 3.04 per cent for two-year, five-year and 10-year fixes, according to broker L&C Mortgages.
The shorter deals come with fees of £1,495, while the ten-year mortgage deal has a £495 fee.
Despite this, homeowners could save in the long-term if interest rates rise over the next 15 years. A fixed mortgage also provides peace of mind in this current time of uncertainty.
Of course, the problem is that no-one has a crystal ball to predict what will happen in the future.
David Hollingworth of L&C Mortgages told The Sun: "We have seen fixed rates for 15 years and even for as long as 25 years in the past but currently the Virgin products are the only mainstream option for those keen to lock their rate down over the long term.
"That gives peace of mind for the borrower and with rates so low at the moment it could mean that they win out over the fixed rate period if interest rates climb over time.
"But the rates are slightly higher than for shorter term rates so there is a price to pay for the additional security.
"These [mortgages] could be ideal for those looking to fix their mortgage for its remaining term and not needing to review regularly.
"Alternatively, those buying their forever home may like the ability to remove any fluctuation in their payments."
What help is out there for first-time buyers?
GETTING on the property ladder can feel like a grim task but there are schemes out there to help first-time buyers own their own home.
Help to Buy ISA - It's a tax-free savings account where for every £200 you save, the government will add an extra £50. But there's a maximum limit of £3,000 which is paid to your solicitor when you move.
Help to Buy equity loan - The government will lend you up to 20 per cent of the home's value - or 40 per cent in London - after you've put down a five per cent deposit. The loan is on top of a normal mortgage but it can only be used to buy a new build property.
Lifetime ISA - Another government scheme that gives anyone aged 18 to 39 the chance to save tax-free and get a bonus of up to £32,000 towards your first home. You can save up to £4,000 a year and the government will add 25 per cent on top.
Shared ownership - Co-owning with a housing association means you can buy a part of the property and pay rent on the remaining amount. You can buy anything from 25 to 75 per cent of the property but you're restricted to specific ones.
"First dibs" in London - London Mayor Sadiq Khan is working on a scheme that will restrict sales of all new-build homes in the capital up to £350,000 to UK buyers for three months before any overseas marketing can take place.
Starter Home Initiative - A government scheme that will see 200,000 new-build homes in England to be sold to first-time buyers with a 20 per cent discount by 2020. To receive updates on the progress of these homes you can register your interest .
Mike Scott, property expert at estate agency Yopa, adds that the new deal is a "welcome addition" to the market but warns that it needs carefully consideration before you take it out.
He said: "It’s not for everyone, since it commits you as well as Virgin for that 15-year period, and many people may want to move on within that timeframe.
"You can get a significantly lower interest rate for a five-year fixed rate, but of course you run the risk of much higher repayments in five years’ time if interest rates have increased."
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In June, Loughborough Building Society became the latest lender to offer a mortgage that lets buyers borrow up to 5.5 times their salary.
Meanwhile, first-time buyers can borrow £500,000 with NO deposit at Barclays, as long as a family member contributes 10 per cent of the property purchase price from their owns savings.
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