Should Northern Rock cut mortgage rates?

Simon Lambert, Assistant Editor, This is Money, replies: Northern Rock became infamous for its 125% Together mortgage and was at the forefront of the 100%-plus mortgage movement.
However, while it had a chunk of customers with little equity, or none at all, it also had plenty of customers with good credit histories and substantial equity.

Since then a 20% fall in property prices has hit and this has caused major problems for those who took out mortgages with little or no deposit.

They are now in negative equity – their mortgage is worth more than their property - and will find it difficult to remortgage or move home.

But being in negative equity does not mean you will default on your mortgage or lose your home, as long as you can keep up with monthly payments and preferably start overpaying to chip away at the debt.

And this is where Northern Rock's bad debt problem comes in.

Northern Rock's bad mortgage debts have been exacerbated by the decision to encourage remortgaging customers to leave Northern Rock following its nationalisation: with the carrot of telling them they could get better deals elsewhere and the stick of failing to lower standard variable rates in line with the base rate.

This led to large numbers of good borrowers deserting Northern Rock for better rates at other lenders, but those who had borrowed large amounts found themselves unable to get mortgage deals from rivals.

These borrowers are now stuck with Northern Rock and despite Government calls on lenders to lower mortgage rates as the base rate fell, the taxpayer-owned bank has been one of those that failed to pass on all the cuts, leaving its already struggling borrowers paying over the odds.


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Remortgaging your home? Make sure you do it right

Results released by Mortgage Advice Drivers revealed that searches for remortgaging advice increased by 5 per cent since May bringing the total to 33 per cent.

These latest results prove that not many people are so clued up when it comes to remortgaging their home and need a trusted website to access all their information and advice.
And at Remortgage.com there is




an array of advice and information to make sure you know just how it all works and how you can get the best offer when it comes to remortgaging your home.

The website gives practical advice on remortgages and everything that comes along with the process that often many people forget or don’t know much about.

From features about ‘Home Equity Remortgage’ to ‘Important points to consider when remortgaging’ the team don’t miss a trick when it comes to the property market.

Their advice and trusted advice will help you put everything into perspective when it comes to remortgaging your home.

They make sure that you are not left in the dark about anything and can help you with retrieving quotes as well as testing out Remortgage Calculators and how accurate they actually are.

As Remortgage.com doesn’t actually give out remortgages or home loans, you can trust that their advice is unbiased and not tied to any one company.

And because remortgaging your homes is such a tough and big financial decision, Remortgage.com want to make sure that you ask yourself as well as mortgage lenders the right questions in order for it to benefit you

And Remortgage.com do not see remortgaging your home as a step down or negative move. If the process in the long run will potentially save you and your family money, then you are doing the right thing.

In the current recession most people are suffering and will continue to suffer in fear of stepping down the ladder and not regaining what they had back.

People who do this suffer long term as they can be left with nothing and have to declare themselves bankrupt, which is not a place you want to be in.


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