It has been noted in the media this week that the nationalised bank Northern Rock has finally begun to offer mortgages to existing customers once again.
Those borrowers with Northern Rock that are coming to the end of their mortgage deals are able to take out new mortgages with the bank providing they meet a few strict criteria and have a minimum of 25 per cent equity.
This move is being seen as a possible precursor to a sale as this will improve the bank’s mortgage book.
Before the credit crunch, Northern Rock used to offer the same deals to existing borrowers on its book as it did to new borrowers but this stopped. Those coming to the end of their deal only had two choices – to stay on the Northern Rock deliberately expensive SVR or to remortgage elsewhere.
This always seemed rather odd to some experts because it did mean that those who stayed on the bank’s mortgage books were those who could not afford to move elsewhere, in other words the more risky customers.
Northern Rock said of its move:
“It is a selected number at the moment. We are looking at credit quality and it is up to 75% loan-to-value. It is very much initial steps. We are going to see going forward whether we can widen the criteria.”
Moves such as this are a good sign for those in the financial industry and those taking CeFA and CeMAP training.
