I just restarted my machine and see that my MIDI using any VST plugin (Halion Sonic, retrologue) are lagging by almost a half second. I also checked my buffer and I increased to 1024 but still a serious lag.
You should reduce your buffer to at least 128 or less. Most soundcards now are quite capable of quite a lot less.
If using an onboard (motherboard mounted) soundcard try using ASIO4ALL to see if that tightens anything up but I’d strongly advise getting an audio/midi interface dedicated to the job. Cubase is built to use those optimally.
If you do use a “proper” card the check you’re using the correct driver from inside Cubase’s Device Setup under the ASIO section.