How will the Northern Rock nationalisation affect current Northern Rock mortgage holders?
Posted on 17 February 2008
How will the Northern Rock nationalisation affect current Northern Rock mortgage holders? Will it affect our repayments? Any information would be grateful please Kate.
Hello John,
The nationalisation should not affect existing mortgage holders; If you have a fixed rate the payments can't change, and when you reach the end of the deal you should remortgage away to the best deal anyway (which won't be Northern Rock as their new rates are not attractive at all). If you are on a tracker, they are obliged to track the Bank of England bank rate regardless so you are protected. If you are on a deal which is a discount from the SVR there is a chance that Northern Rock won't reduce their standard variable rate when the Bank rate is next cut, so you could say that you might lose out slightly there, but their SVR is more competitive than many lenders anyway, so it's swings and roundabouts.
In short, your mortgage should be no different to anyone else's. Even in the worst case scenario; that Northern Rock is wound down and allowed to go under, the first thing they will sell off to a new bank is the mortgages, as full contracts; so you'll simply have a new provider; potentially with all the benefits of your current contract (the great flexibility), and some new ones too.
Categories: Current rates & the market
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