Northern Rock scraps two thirds of mortgage products
May 27, 2008
Troubled mortgage lender Northern Rock has announced that it will be scrapping many of its mortgage products after the recent turmoil that resulted from its decision to take an emergency loan from the Bank of England. Following the discovery of the loan many of the 1.5 million savers with the Rock decided to withdraw their savings amidst fears that the bank was on the verge of collapse. This saw share prices tumble by over 80% as well as billions of pounds in savings being withdrawn from the bank.
The lender previously offered over two hundred different mortgage products, and was the fifth largest mortgage lender in the nation. However, in a recent announcement officials from Northern Rock have stated that around two thirds of its mortgage products will be taken off the market in a bid to try and cut back on lending and get back on track. The lender has been told that it needs to tighten its lending, and this move is one way of doing this state officials.
One industry official stated: “The move towards more of a one-size-fits-all product structure, by simplifying and streamlining products, brings the Northern Rock range more in line with the rest of the market.” She added that it “…is more of a sign that it is looking to reduce operational overheads, rather than anything more sinister.”
The recent credit crunch has also affected Northern Rock as well as other lenders and financial institutions. One expert added: “The last nine months has seen a steady increase in the rates available for unsecured personal loans. Only four months ago, sub-6% rates were available, whereas today you would be hard pushed to get your hands on a rate of less than 6.9%. It comes as no surprise to see lenders increasing their lending margins in what has become a far more risky environment to do business.”
Recent additions
- Possible house price crash causes increased fears
- Mortgage costs add to housing slump problems
- Internet bank withdraws mortgages for non-customers
- BoE faced pressure to cut interest rates
Related Articles
- Ridley gets no payoff from the Rock Northern Rock, the stricken High Street bank that went through a period of turmoil recently, has recently announced that it will not be offering any
- More lenders announce rate cuts Following the Monetary Policy Committee meeting in December the Bank of England announced that the base rate would be reduced by 0.25%. This followed a
- Northern Rock accused borrowers of late mortgage repayments Stricken bank Northern Rock has made a blunder, after wrongly accusing thousands of its customers of being late with their mortgage repayments. The bank, which
- No Northern Rock share dividend payout Troubled high street lender, Northern Rock, has recently announced that it will not be paying out any share dividends to shareholders. The announcement follows the
- Can the Rock win over consumer confidence? Since the crisis that surrounded Northern Rock last year, when it was discovered that the Rock had taken an emergency loan from the Bank of
Comments
Got something to say?