The New Year has brought with it heavy competition for mortgage lending within the UK housing market. It can be seen everywhere in fact, from online mortgage rates to brick and mortar facilities offering deals which are hard to turn away from. Many lenders are seeing record numbers of mortgage applications, as well as remortgage applications. However, for those thinking there is much farther down to go on interest rates, think again.

The bank Virgin Money sees interest rates not falling much further from the level they currently sit at. Mortgage rates are at historic lows, but there is a line which banks cannot cross. Banks must take into account their capital strength which is, on paper, the amount of strong loans a bank has in their possession versus weak ones.

Virgin Money is a 2011 created collection of bank branches bought by Richard Branson of Virgin. It is 75 branches strong and is the best performing banking share since November. It was the healthy part of Northern Rock when Branson purchased it from the government.

The CEO of Virgin Money, Jayne-Anne Gadhia, commented on the possibility of interest rates falling further, saying: “I would have thought that, given the capital position of banks and the leverage ratio, we’re probably in a place where it’s unlikely the price will go down further.”

Gadhia added: “Certainly the market’s as competitive as I can remember it. The mortgage market has opened this year lower than it did last year, that’s fired competition.”

Original mortgage deals and remortgage deals can now be found with many different size lenders, but that trend may reverse itself as election time nears.