Virgin Money has become the latest lender to slash its mortgage rates by up to 0.20% as swap rates continue to drift lower amid the “relative calm in the Middle East”, with brokers anticipating other lenders will shortly follow suit. Purchase fixed rates at the provider will be trimmed by up to 0.20%, shared ownership fixed rates by up to 0.10%, and remortgage fixed rates will be decreased by up to 0.19%.

This follows Nationwide’s reduction of selected fixed rates by up to 0.25% on Friday. Brokers have encouraged borrowers to secure deals immediately, given the unpredictable nature of the Iran and US ceasefire and Andy Burnham’s expected replacement of Sir Keir Starmer as Prime Minister within the coming months. Justin Moy, managing director of Chelmsford-based EHF Mortgages, said “these are decent rate reductions from Virgin Money as they look to fall in line with other lenders who have cut rates over the past week or so”.

He continued: “The relative calm in the Middle East makes for an interesting time for money markets, which are also assessing the direction of the Prime Minister-elect. Risks remain inflationary pressure and a government potentially spending more than it can afford, so this is a good time to jump on a deal if you need a new rate by the end of 2026. Borrowers might be surprised to hear that we can already help with mortgage rates that will need to be renewed around Christmas.”

Momentum growing

Andrew Montlake, CEO of London-based Coreco, said “it’s starting to feel like there’s a little momentum growing in these cuts, which is welcome news after a turbulent first half of the year due to the war in the Middle East”.

He added: “But borrowers should not assume rates will continue to fall as there are countless variables at play, both domestic and international, which could see recent reductions reversed.”

Darani Ganesharajah, mortgage broker at Springtide Capital, noted swap rates, which are used to price fixed rates, have been trending down in recent days and “it’s great to see Virgin joining the party while funding costs improve”.

She went on: “Virgin Money clearly aren’t taking a step back. If anything, it looks like they’re pushing even harder for market share. This is good news for brokers but even better news for borrowers.”

Jamie Elvin, director of London-based Strive Mortgages, said “Virgin Money’s latest reductions are another sign that lenders are becoming increasingly confident on pricing”.

He added: “The Virgin cuts themselves are modest, but the significance is that they’re spread across purchases, remortgages and product transfers, suggesting this isn’t simply a tactical tweak, but a broader push for market share. If swap rates remain where they are, I’d expect further reductions from other lenders over the coming days.

“That said, borrowers shouldn’t try to second-guess the market. A good deal today is often worth far more than waiting in the hope of shaving another 0.10% off the rate, particularly when lenders allow you to switch onto a cheaper product before completion.