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Virgin Money hikes mortgages rates after Budget, while Santander cuts

Published 31/10/2024, 10:21
© Reuters Virgin Money hikes mortgages rates after Budget, while Santander cuts
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Proactive Investors - Two banks had different reactions after the Budget, with Virgin Money (LON:VMUK) nudging up mortgage rates and Santander (BME:SAN) reducing the price of borrowing.

Accord mortgages also announced reductions.

Virgin Money, which is now part of Nationwide since its takeover was completed at the start of this month, announced increases across its range of fixed-rate mortgages, with increases of up to 0.15%.

UK bonds have been selling off, sending gilt yields higher in the lead up to the Budget, but have continued to rise today.

Meanwhile, Santander reduced its rates by up to 0.36%.

"Virgin Money’s decision to raise rates right after the Budget announcement feels like ill timing, particularly when many are watching closely for economic stability signals. At this point, it’s too early to say if this move will spark a broader industry shift or simply reflect Virgin’s own strategic response," says Kim McGinley, director and specialist broker at VIBE Finance.

"Mortgage holders and those looking to borrow will be keen to see whether other lenders follow suit. But for now, patience is key; it’s important to observe how the market reacts and whether this adjustment becomes a trend or remains an isolated decision."

Stephen Perkins, managing director at Yellow Brick Mortgages, says the moves within hours of the Budget shows that "the dust has not yet settled following Labour's shake of the fiscal snowglobe.

"Swap rates over the coming days should reveal the direction of travel ahead of the Bank of England base rate decision next week."

Read more on Proactive Investors UK

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