Virgin Offer New Retrofit Boost Mortgage With Up To £15k Cashback

Virgin Money has introduced a new mortgage product, the Retrofit Boost Mortgage, to help homeowners improve their homes’ energy efficiency.

The mortgage is offered in partnership with Hive Energy and offers customers between £3,000 and £15,000 cashback to spend on making their homes more energy efficient.

With a cost of living crisis and a new government committed to building more houses, upgrading the current stock is important. Virgin Money’s new product offers an interesting incentive to customers looking to futureproof their homes.

According to the National Office of Statistics, the average Energy Performance Certificate rating for a house in the UK is band D. With band A the gold standard, there’s scope to improve the energy efficiency of homes across the country, and this mortgage is a good incentive.

Not only could the improvements lower energy bills, but they could also boost the price of houses, which is a win-win situation for homeowners.

The Retrofit Boost is exclusively available through an intermediary registered with Virgin Money and is open to customers looking for a residential, buy-to-let mortgage or remortgage.

Let’s delve into this mortgage and see what’s on offer.

How the Retrofit Boost Mortgage works

The Retrofit Boost Mortgage aims to plug a gap in funding for home improvements.

By partnering with Hive to offer this mortgage, Virgin Money is making it easier for those customers who want to make improvements to their home but might be worried about finding the money or providers to do so.

Hive offers its expertise and services to customers who can use the cashback on one of its products. Customers are also free to choose a different provider to make these improvements if they wish.

If you’re a landlord, this might be an intriguing option, as all rental homes must have a minimum EPC rating of E. This mortgage offers a simple solution if you’re looking to upgrade the energy efficiency of your portfolio.

What products are available?

Virgin has been accommodating with this mortgage and offers three different types.

• A five-year fixed mortgage with £3,000 cashback
• A seven-year fixed mortgage with £10,000 cashback
• A ten-year fixed mortgage with £15,000 cashback

The variety of term lengths will give customers plenty to consider. The temptation will be to choose one of the longer-term mortgages to get the higher cashback.

However, it should be noted that the interest rates on a Retrofit Boost Mortgage are higher than Virgin’s other offers to compensate for the cashback they’re providing.

It’s worth considering whether it’s worth taking the longer-term options to access the cashback. Customers could be locked into higher rates for longer if the Bank of England cuts the base rate.

So, although the cashback may help with home improvements, if rates do fall, they could be stuck with higher monthly repayments for longer.

What home improvements can you make?

Customers can spend their cashback on a range of improvements. However, the cashback might not cover the full cost of these improvements.

The improvements you can make vary from putting solar panels on your roof to installing a heat pump.

Again, your improvements will depend on how much cashback is available, but plenty of options exist. If you have some spare cash, you can make more than one improvement.

Is the Retrofit Boost Mortgage Worth It?

The Retrofit Boost is an interesting offer from Virgin and a welcome one given the need to upgrade Britain’s housing stock, which is among the oldest in Europe.

It offers clear incentives for customers to upgrade their homes and may persuade them to take out a mortgage so they can access the cashback to use on long overdue home improvements.

However, customers should be aware that the interest rates for this type of mortgage are higher than Virgin’s other offers.

Instead of locking into a ten-year fixed mortgage to access the £15,000 cashback, customers might be better off taking out a loan if they want to make home improvements.

Should interest rates fall, customers could be stuck paying a higher rate for a long time.

The idea of a Retrofit Boost Mortgage is good. It emphasises upgrading homes, which is important, and it will be interesting to see if more lenders follow suit.

However, the offer might not be for everyone, and customers should assess all their options before they commit. It’s best to speak to a broker beforehand to get the full picture of this mortgage and other options available.