Update on Northern Rock's withdrawal from Lifetime mortgage market
Posted on 6 October 2009 by
On the Mortgage Strategy web site a spokeswoman for Northern Rock is quoted as saying: "Northern Rock regularly review its products and services to make sure they are meeting customer needs.
"Lifetime mortgages in particular have seen little consumer demand and are no longer seen to be part of our core product range."
She says that the decision was based on volumes of applications.
But she adds: "Lenders also have to take into account what is happening with their peers and so other lenders withdrawing from the sector probably would have been a factor in the decision."
Why can’t Northern Rock be more honest about the reasons for pulling out of the lifetime mortgage market. Other lenders who have pulled out of this market recently have stated that it is due to funding difficulties. Why would Northern Rock be any different?
The final comment from the Northern Rock spokeswoman gives the game away. You don’t have to be a rocket scientist to work out that other lenders withdrawing from the sector would increase demand, not reduce it. By saying “other lenders withdrawing from the sector probably would have been a factor in the decision” what Northern Rock is really saying is that it doesn’t want to be one of a smaller number of lenders still offering lifetime mortgages. That is nothing to be ashamed or defensive about. It is just a realistic assessment of the situation we are in.
Categories: Mortgages, Personal finance, House and home
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