RSS FeedsNorthern Rock aims to get rid of 60% of Mortgages
02/04/2008
As deals end on current Northern Rock Mortgages, homeowners will be encouraged to find a new mortgage with rival lenders in a plan to reduce mortgages by over a half.
The newly appointed executive chairman of Northern Rock Ron Sandler said that he expected anything between 25 and 30 billion pounds worth of mortgages to be due for renewal this year.
In order to encourage borrowers to move their existing mortgages elsewhere, the now nationalised bank said that it will introduce higher rates this year. The aim to is to move 60% of existing mortgage lenders elsewhere. All of this is to help achieve the goal of reducing the mortgage book from £107 billion to £50 billion by the end of 2011.
Northern Rock has commented that it will not be appearing in the “best buy” top three rankings for the remainder of this year. The bank also suggested that it is not planning to take more than a 2.5% allocation of all new mortgages gross and a 1.5% allocation of UK deposits. This is a shift from the Northern Rock picture before it encountered problems where the figures were 7.5% and 1.9%.
Sandler suggested that the bank will have encounter some difficult times over the next few years with suggestions of substantial losses in the year to come. The bank would be looking at another three years before breaking even.