Northern Rock shows existing customers the door

[CoverItAll]

MORTGAGE STRATEGY ANNOUNCED:

Northern Rock is advising customers approaching the end of their deals to remortgage elsewhere.

One mortgage broker has told Mortgage Strategy that he received a call from the bank earlier today advising him that his 5.79% three-year fixed deal was due to expire on May 1 and advised him he would probably be better considering alternatives to NR's current deals.

It was a follow-up call to a letter the broker received last week.

The broker, who has been a mortgage customer of NR's for eight years, says: "The lady told me that the bank's deals aren't very competitive at the moment and weren't as good as others in the marketplace.

"I was going to be leaving anyway because the deals are so uncompetitive but I still didn't expect the call."

The broker acknowledges that NR's reminder is a good service to its clients.

But he adds: "It gives you an alternative spin on the government's line about nationalisation, in terms of it still being business as usual at the bank and it still taking on business."

A spokesman for NR says: "It is something we have confirmed for some time. Since September we said we were taking prudent steps to reign back our lending.

"We're writing to customers coming to the end of their deals and think it's fair to say there are probably better ones out there, and to conhtact an IFA about them."

The spokesman adds that customers approaching the end of their current deals are welcome to remain with the bank on its SVR, which is currently 7.59%.

[Reviva UK]

I think that the days of cheap credit are well and truly over.

The market place will become very competitive for some customers who have an unblemished credit history, but anyone who has been 5 seconds late with any payment can look forward to expensive money.

Looks like NR are doing what Egg did by making their loan book look more attractive to a purchaser because the number of "unattractive" clients has rduced.

Charming really.

I wonder how foreign mortgages from europe will compete with NR & haifax in the coming months.

[Soulgrowth]

Do you predict a European market in mortgages opening up then Paul?

Debbie

[Reviva UK]

I think that there is "cheaper money" abroad at present so you might find a european bank have a look at us.

There are challenges with foreign loans in foreign currencies becaus eof the exchange rate

[Soulgrowth]

They always say that "nature fills a vacuum" ... and I suppose as one institution pulls out, another will fill it's place. It will be interesting to see how things develop then.

Debbie