|    FM Home   |    FM News   |    FM Forum   |    FM Blog   |    24th of February 2018
|   Banking  |   Insurance  |   Property  |   Mortgages  |   Economy  |   Investments  |   Credit Cards  |   Debt  |   Loans  |   Pensions  |   Companies  |  

Mortgage News feed Mortgage News

All Financial News feed All Financial News




Northern Rock borrowers trapped on expensive rates

Bookmark and Share

by Kay Mitchell
Northern Rock borrowers trapped on expensive rates

Mortgage customers of Northern Rock who are seeing their fixed-rate mortgages run out are facing huge increases because they are trapped on expensive rates with the crisis-torn lender.

The business plan for the nationalised bank saw attractive rates scrapped in an attempt to put-off new customers and encourage existing ones to re-mortgage with another lender.

Those who borrowed 100% of their property’s value will be worst hit as these types of deals are no longer on offer as a result of the credit crunch.

Around 200,000 people signed up for Northern Rock’s Together mortgage product, which enabled them to borrow up to 125% of their property’s value.

Very few lenders now offer deals over 95% of a property’s value while those that do are extremely uncompetitive.

For those who do not have the funds required to fill the gap between their old fixed-rate mortgage and a re-mortgage deal, will have little or no choice but to stay with Northern Rock on its interest rate of 7.49%.

At the beginning of last month, Northern Rock announced a deal with Lloyds TSB to give its customers a re-mortgage deal.

However, Lloyds TSB accepts applications only from Northern Rock customers who hold at least 20% equity in their homes. Lloyds has been criticised for only accepting customers who are low-risk.

Newcastle-based Northern Rock was taken into public ownership after the Government rejected takeover bids from the board of Northern Rock and a consortium led by Sir Richard Branson’s Virgin Group.

Discuss this in the Finance Markets forums

Story link: Northern Rock borrowers trapped on expensive rates



News posted: July 1, 2008

Financial Services:





Related financial stories to: Northern Rock borrowers trapped on expensive rates:
Previous: «
Next: »

Visited 3477 times, 3 so far today

No Comments

No comments yet.

RSS feed for comments on this post.

Sorry, the comment form is closed at this time.

Tags: , , ,