Now Virgin looks at mortgages by phone

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The Independent Online
Virgin, the airline to cola conglomerate, is considering plans to launch a telephone mortgage operation to bolster its burgeoning financial services business. The company believes mortgages could fit alongside the growing range of financial products it offers over the phone, including personal equity plans and life insurance.

But Martin Campbell, product development manager at Virgin, stressed yesterday a final decision had not been taken on whether to proceed with a mortgage lending operation.

If it is, any launch would follow that of Virgin's telephone-based personal pensions service, expected to come on stream in the late autumn. One option might be to team up with an existing mortgage lender, with Virgin broking the deal.

Virgin's move comes as it unveils a new stream of life insurance products today, including term assurance, critical illness policies and mortgage protection cover. It hopes its policies will prove as popular among consumers as its low-cost personal equity plans, which have taken more than pounds 325m since launch last year.

Mr Campbell said: "Clearly, if we were planning to add mortgages to our portfolio, they would fit quite easily alongside our other products.

"They would allow customers to use one of our Peps as the repayment vehicle and to protect their payments with a repayment mortgage protector plan."

Virgin's decision to investigate mortgage lending by phone follows the growing success of other new entrants, including Bradford & Bingley, into the new market. In the past year, Bradford & Bingley has lent more than pounds 100m of funds at its market-leading variable rate of 5.99 per cent.