Virgin and Atom Cut Rates by Up to 0.20%: More Opportunities for Homebuyers in 2025

The 2025 mortgage market is heating up as two major lenders, Virgin Money and Atom Bank, have slashed their rates, making it a prime time for homebuyers. Virgin Money has reduced rates across its purchase, buy-to-let, and product transfer ranges, with cuts of up to 0.20%. Atom Bank has also followed suit, trimming rates on its prime residential mortgages, further enhancing competition in a highly competitive market.

These changes provide more affordable options for those looking to enter the property market, especially for first-time buyers and those with smaller deposits. Despite overall higher interest rates, the reductions signal increased confidence from lenders and more opportunities for buyers to secure better deals.

Virgin Money's new exclusive mortgage products offer a range of options, including a 75% loan-to-value (LTV) five-year fixed rate at 4.09%, with a fee of £895. They have also reduced rates on a variety of exclusive purchase products, including the 80% LTV exclusive two-year fixed rate fee-saver, which is now down by 0.08% to 4.44%.

Meanwhile, Atom Bank has reduced rates on its prime residential mortgages, with the largest cuts applied to products for borrowers with smaller deposits. Their two-year and three-year fixed rates now start from 5.14%, while their five-year fixed rate is available from 5.09%. These reductions mark an exciting time for first-time buyers and others looking to secure better mortgage deals in a competitive market.

However, despite these reductions, low-deposit borrowers will still face rates higher than those with larger deposits. Buyers with a 40% deposit can access rates below 5%, underlining the importance of financial planning when looking for the right mortgage deal.

While these rate cuts offer more accessible options for homebuyers, the competition remains intense. Research from Zoopla shows that homes in England and Wales are selling faster than ever, with the average property spending just 36 days on the market before an offer is agreed. Two-bedroom homes, a popular choice for first-time buyers, are selling even faster, averaging just 23 days.

For homebuyers hoping to make a move in 2025, the key will be speed. With a high level of competition and reduced availability of properties, getting your mortgage in place early is crucial to securing your ideal home. As Richard Harrison, Head of Mortgages at Atom Bank, explains, "This is particularly important for borrowers with small deposits, who may have tighter budgets and fewer options to choose from."

Mortgage expert Rachel Springall from Moneyfacts supports the growth in mortgage product availability, but warns that only 6% of mortgages cater to 5% deposit buyers. Affordability continues to be a challenge, particularly with interest rates hovering above 5% for low-deposit buyers.

Geographically, homes in the North of England are generally selling faster than in the South, due to lower house prices and strong local demand. This trend is evident in places like Manchester and Waltham Forest, where homes are averaging just 19 days on the market before an offer is made.

As the market becomes more competitive, buyers are urged to work closely with estate agents and mortgage advisers to ensure they’re making the right choices. With many more options now available, making informed, strategic decisions will be key to securing the best mortgage deal for your circumstances.

At Mortgage-Tek, we are here to guide you through this evolving landscape. Whether you're a first-time buyer or looking for your next property, our team of expert advisers will help you navigate the market and secure the best deal possible.