Northern Rock Introduces Low Mortgage Rates Once Again

In the past 2 weeks, British bank Northern Rock that was nationalised in 2008 as a result of its inability to repay taxpayers’ money, introduced new attractive mortgage deals 3 times in an effort to double the amount of its mortgage lending in 2009. The latest introduction of the bank was mainly aimed at UK borrowers with small deposits, particularly, first-time buyers. Those with 20% deposits are now able to benefit from brand new mortgage deals offered at a low interest rate of 5.69% and a fee of £595. Earlier this month Northern Rock has cut the interest rate on a number of its tracker and fixed mortgage deals by 0.4%. Let us remind that the lender earlier promised it will lend £2.7 billion in new mortgages and remortgages in the second half of 2009, which compares to £1.3 billion that were lent in the first half of the year and makes a total of £4 billion – just the amount of lending the bank committed itself to in August 2009. Northern Rock also said it plans to make an injection of as much as £14 billion worth of lending into the UK mortgage market by offering attractive mortgage deals for new customers and remortgage deals to existing borrowers. UK mortgage brokers have already reacted to the move of Northern Rock by saying that the launch of new competitive mortgage deals is highly welcome as it enhances the competition on the British mortgage market of borrowers with small deposits. Trinity Financial Group’s product and communications manager, Mr. Aaron Strutt, said that the past week was marked by a significant improvement in the availability of new competitive mortgage deals, which definitely benefits borrowers and UK mortgage market as a whole. A number of other UK lenders have also introduced new deals and cut rates recently; those include Woolwich, Cheltenham & Gloucester, and Nationwide.