Virgin Money, also known as Virgin Home Loans, is very different from most banks because – well, they aren’t a bank!
While the Virgin Money brand was started by Sir Richard Branson over 24 years ago, in recent years, BOQ has bought the rights to distribute Credit Cards, Home Loans, Superannuation and various insurance products across Australia. In fact, Virgin money is 100% owned by BOQ.
So does Virgin Money offer the same glitz and glamorous service we have come to expect from the Virgin Brand?
Today we review Virgin Money Home Loans and put them through their paces.
Note this review, interest rates, and product information is correct as at 11 July 2023, and all of this information is subject to change without any further notification. Any credit applications are subject to meeting the specific bank’s criteria, and the decision is at their final discretion.
Table of Contents
What are Virgin home loans like?
The top 5 things Virgin Money is good at:
- Low deposit home loans: Virgin Money is one of the few providers that will allow lending up to 95% PLUS Lenders Mortgage Insurance. In other words, they will consider lending to first homeowners with a 5% deposit.
- Frequent flyer points: if you applied for a home loan before 25 May 2020 and settled by 31 August 2021, you are eligible to earn velocity points. Unfortunately, the service is no longer being offered to new home buyers.
- Multiple units on one title: If you’re looking at buying properties with multiple units on one title—for example, an older style block of flats with up to 6 units on the one title—Virgin will look at lending up to 65% LVR.
- Cash out. Virgin’s credit policy is pretty flexible when it comes to getting cash out against your existing property. They do not require any documentation to substantiate why you need the funds — up to $50,000 for personal use or $100,000 for investment purposes.
- Non-Genuine savings They are pretty loose regarding genuine savings (deposit savings that you’ve held for over 3 months). They will consider non-genuine savings or gifted funds on purchases with as little as a 5% deposit.
The top 5 things Virgin Money isn’t so good at:
- Strict credit criteria. Virgin Money is owned by BOQ and has less tolerance for risk than the bigger banks, so applications with Virgin Money are scrutinised in much more detail than other larger institutions. For example, if you are buying an investment property and will continue renting, Virgin want to see your current rental agreement to confirm the amount.
- Slower home loan approvals. As Virgin Money will sometimes offer really good interest rates throughout the year, and it can cause a massive influx of home loan applications. As a result, their credit and processing times increase. In the past, this has caused internal processing issues, and it can take weeks for home loans in QLD to get approved.
- Properties that are unique Virgin Money has much more strict criteria for properties in mining towns, high-density apartments and units and other unique types of properties. For example, there are limitations in the maximum lending available if you are buying an apartment in Brisbane (postcode 4000), Newstead (postcode 4007) or Teneriffe (postcode 4005) in Queensland.
- People with bad credit Due to their credit policy, Virgin Money Home Loans cannot help people with bad credit, like discharged bankrupts. If you are borrowing less than 80% of the property’s value, they might consider a lower credit score but on a case-by-case basis.
- No electronic valuations. Larger banks are adopting electronic valuations, also known as AVMs or RP Data reports, which can speed up the refinance process. Virgin still require full valuations to be completed on applications with an LVR above 80%, and this can slow things down.
What are the different home loan products they offer?
Virgin Home Loans offers a limited range of mortgage products. Their most popular products include:
1. Reward Me Home Loan Variable
This home loan is like a hybrid between a traditional professional package home loan and a basic home loan. The Virgin Reward Me Home Loan comes with a few interesting perks – especially for first-home buyers:
- Interest rate specials
- Up to 20% discount on Lenders Mortgage Insurance
- Waived settlement fees, saving you $150
- 100% interest offset account
There are some downsides to the package:
- Interest rates aren’t always the best in the market
- Tougher credit criteria make it harder for home buyers to get their loans approved.
- The credit card fee isn’t included in the overall package.
- $10 per month fee and $300 switching fee.
- Not available for the purchase of land or construction.
2. Virgin Money Construction Loan
The Virgin Money Construction loan is like most banks’ building or construction loans and allows you to:
- Construct a home on land that you already own
- Buy some vacant land and build a house on it—known as a home and land package.
- Complete some major renovations on your place, like a new kitchen or extension.
Now, there are some limitations to their construction loans, including:
- Work needs to be completed by a licensed builder.
- You cannot complete major renovations on an investment property.
- Funds are to be drawn progressively via a progress payment schedule – so you can’t get the funds in one big chunk of cash.
What are Virgin Money’s interest rates?
Virgin Money’s home loan interest rates are fairly competitive compared to the big 4 banks. They can be hyper-competitive depending on the time of the year, and in recent times have had market-leading interest rates.
What documents does Virgin Money need for a home loan?
Virgin Money’s application checklist is fairly standard compared to most lenders. Assuming you are a salaried employee and you are purchasing your first home, they would ask for the following:
- Signed Application Form and Privacy Act form completed by all borrowers
- Identification documents: Current Medicare + Drivers license or Australian passport
- 3 Months’ bank statements showing your salary credits with the name of your employer
- 2 Most recent computer-generated payslips
- Evidence of your genuine savings— statements to show the funds have been held for more than 3 months.
- Most recent statement showing all continuing liabilities – i.e. any open credit card, personal loan, or overdraft statements.
- Signed Contract of Sale
Where they differ from some of the bigger lenders is requiring more information if you are in casual employment, contract employment or receive bonuses and commission. You can download their checklist here.
How Much Can I Borrow From Virgin
Virgin’s credit criteria are subject to change at any time, and all lending is up to credit verification and satisfactory approval. Still, as an indication, we have run the following scenario through their borrowing calculator:
- A single person living in Brisbane (in the 4000 postcode)
- Earning $70,000 PAYG salary income
- Average monthly expenses of $2,000
- Has a credit card of $5,000 and no other debts
- Assuming this person has a 20% deposit as genuine savings
- Figures as at 15 December 2022 subject to credit criteria and will change without notification.
We ran the figures through our serviceability calculator and got the following results:
As you can see from the results, Virgin Money is at the upper end of borrowing capacity compared to the list of other lenders, giving a capacity of $338,857.
These figures are indicative and are subject to meeting credit criteria, valuation and satisfactory verification of all supporting documentation. They are accurate as at 15 December 2022 and subject to change without any further notification.
Would you like to know your borrowing capacity? Chat with our home loan experts to see what you can afford.
What else does Virgin Money offer?
Virgin money is not a bank, which means they do not have branches, and support is all online or via phone. This works well for some people but can be frustrating for others.
In addition to the home loan, Virgin also offers the following:
- Credit cards. According to their website, Virgin Money also offers credit cards that can earn up to 100,000 bonus velocity points —25,000 points for each month you spend $3,500 or more on eligible transactions in the first 4 months.
- Savings account. You can open a savings account which can give you an interest rate of up to 4.60% per annum.
- Everyday account. Virgin also offers an everyday account with no monthly fees.
- Insurance. You can get home insurance, car insurance, travel insurance, income protection and even life insurance from Virgin Money.
Before taking the deep dive with Virgin, we suggest reading up on a few online reviews…
What are some Virgin customer reviews?
Unfortunately, Virgin Money home loans do not have great reviews – and most of the complaints have to do with bad service.
How does Virgin compare to other lenders?
Overall each Lender, Bank, and Credit Union has its advantages and disadvantages— it all depends on your personal situation.
Ready to take the next step toward buying? Our team at Hunter Galloway is here to help you buy a home in Brisbane. Unlike other mortgage brokers who are just one-person operations, we have an entire team of experts dedicated to helping make your home loan journey as simple as possible.
If you want to get started, please give us a call at 1300 088 065 or book a free assessment online to see how we can help.