Virgin Money enters Australia’s home loan market

In addition to credit cards, insurance, and superannuation, Virgin Money Australia has now started offering home loans through mortgage brokers in the hopes of expanding its services in the country.

“Deposits and broader home loan products are on the road map in the near term,” said Greg Boyle, chief executive of Virgin Money Australia.

The Bank of Queensland subsidiary first started in Australia in 2003 but lost around $14.2 million as it tried expanding in 2011 and 2012. But this time, the lender is taking a page from its tremendous success in the United Kingdom in order to make their home loans profitable.

“The mortgages there (in the UK) have worked really well,” said Virgin founder Sir Richard Branson. “Learning from that and asking lots of questions in Australia, the team has launched this product in Australia.”

The bank’s new home loan offers Velocity frequent flyer reward points to customers on an ongoing basis. Though it might be reminiscent of National Australia Bank’s reward points, Boyle is quick to point out that Virgin’s is different.

“The key point is that it’s an enduring component of our product, not a one-off marketing campaign, which is why we offer points upfront, points on a monthly basis, and points on anniversaries,” he said.

Boyle also believes that Virgin Money can eventually become a major player in Australia’s lending space.

“Customer feedback is very clear. They want Virgin to be a major player in this space, and if we can replicate the success of the Virgin Money UK business, which continues to significantly outgrow the market, then it’s an exciting time for the Virgin Money business,” he concluded.