Northern Rock starts to offer mortgages again
Move seen as a prelude to possible sell-off of bank
Nationalised lender Northern Rock has started offering mortgages to existing customers for the first time since it almost collapsed in late 2007.
The lender is allowing borrowers coming to the end of deals to take out new mortgages with the group, provided they have at least 25% equity in their homes and meet strict “credit quality” criteria. The decision is being seen by some as a step towards an imminent sell-off, as it should improve the quality of the bank’s loan book making it more attractive to bidders. Northern Rock used to offer existing customers the same deals as new borrowers, but stopped after it almost went bust. Existing customers coming to the end of their deals were then left with a choice: stay on the bank’s standard variable rate or remortgage with another lender.
The bank said it was just a “selected number” of customers at present but it could revise the criteria in future.
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