Northern Rock launches 90% mortgage
Wednesday, 2 March 2011 2:20 PM
Mortgage lender Northern Rock has announced an attractive set of home loan packages, which could help more of Britain's first-time buyers get a foot on the property ladder.
The state-owned bank, known for its credit crunch collapse and subsequent bailout, has unveiled three new mortgage products in a bid to boost profits as it gears up for a return to private sector finance.
Each of the new Northern Rock mortgages requires just a ten per cent deposit from borrowers – down from the previous upfront payment of 15 per cent.
However, to offset the heightened risk of mortgage customers defaulting, the loans will charge a higher rate of interest than those requiring more equity.
Ray Boulger, senior technical manager at John Charcol mortgage brokers, told the Guardian that most people should welcome the news.
"This is good for consumers, some of whom will be able to get credit more easily, and it's good for Northern Rock because it will increase its margins. This, in turn, is good for taxpayers, who own the bank.
"Other lenders will be watching this and I think Northern Rock's presence in this market will increase the likelihood that more 90 per cent mortgages become available in the next few months. The more lenders in a market, the more it attracts other lenders," he added.
Want to be the first to know when we break a story? Follow @AboutProperty on Twitter.
