Virgin Money are going to resist passing on to their customers any increases in funding costs for now, accepting reduced margins instead. Virgin’s home loans are funded by residential-backed mortgage securities from Macquarie bank which has a 10 per cent stake in the company. If the current level of expense in credit markets persists for a long period Virgin said that it would have to consider raising rates. The company also said yesterday that its credit card business was very profitable despite offering some of the lowest rates in the country.

source: http://www.infochoice.com.au