by Mark Johnston
Northern Rock, the Newcastle based bank that was hit hard during the financial crisis is about to launch a new mortgage product that they hope will see them regain their position in the UK market.
The bank, which is owned by the UK tax payer following a bailout is working on a new range of products as well as looking at buying back some of its toxic mortgages that it had to give away to the ‘bad’ bank that was created as a result of the rescue plan. They are hoping that this will help them win back customers ahead of the government selling them to reclaim some of its money.
Northern Rock, famed for being the first bank in 150 years to suffer a bank run had to approach the bank of England for a loan at the height of the banking crisis. Having failed to find a buyer for then business it was taken into public ownership in 2008. Since then the bank has been working hard to rebuild its business.
Recently Northern Rock re-launched a selection of its mortgage range to tempt customers looking to purchase a new home as well as those looking to re-finance their current loan.
The banks ‘Everyday’ mortgage range of fixed rate home loans have been cut and now start at just 2.88%. Its two year fixed rate mortgage has the lowest rate it has offered this year beating many of its traditional competitors. To make their deals even more attractive, they have also recently reduced their arrangement fees creating some excellent offers for new and existing customers.
Northern Rock became infamous for being the first bank in 150 years to suffer a bank run had to approach the bank of England for a loan at the height of the banking crisis. Having failed to find a buyer for then business it was taken into public ownership in 2008.
Since then the bank has been working hard to rebuild its business and have recently launched a new mortgage product to UK borrowers. Their ‘Everyday’ mortgage range is designed to offer a choice of mortgages to those either look to purchase a home or re-mortgage their current property.
To complement the changes to their mortgage range, they have also cut other rates to attracts the many thousands of customers who are currently sitting on their lenders standard variable rate and at the same time tempt new customers who are looking to buy a home for the first time.
The ‘Everyday’ range of mortgages are designed to offer borrowers an alternative to other home loans by offering a product that is easy to understand with competitive rates whilst providing a degree of flexibility to enable borrowers to overpay up to 10% each year without having to pay expensive early repayment fees. Any overpayment may give customers the flexibility to take payment holidays in troubled times.
Those with smaller deposits or those with little equity have not been left out in the cold this winter either. Northern Rock’s ‘Everyday’ two year fixed rate mortgage only requires a 15% deposit as it has a loan to value (LTV) of 85%. Rates start from 4.38% which was 4.89% before the recent reductions. Those with a slightly bigger deposit of 20% can cut their rate even further by taking out a two year fixed rate mortgage at 3.98% which also has been cut from 4.39%. Both mortgages require a £995 arrangement fee.
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