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| Bank of England Steps in to help Northern Rock – 18/09/07 |
The Bank of England has announced an unprecedented assistance plan to help Northern Rock savers by guaranteeing 100% of their savings in the bank. Whilst many analysts will consider this action too late the Bank of England has moved to try to steady the crisis in the banking world.It is feared that Northern Rock may receive a knock-out blow, however, it is likely that a buyer will step in to save the battered bank. Northern Rock has been a flagship bank in modern times, rapidly growing its mortgage and loans book by introducing market leading and innovative plans. This included lending over 100% loan to value to prime customers based on an excellent credit score rating. Their actual mortgage and loan book is performing very well at a time when other banks have seen bad debts rising, however the company’s lending policy was based on the whole market approach. By doing this Northern Rock has been damaged by the amazing turmoil which has arisen from the USA following the crash of their badly regulated sub-prime lending market.Hopefully Northern Rock will survive and in similar ways to other household names such as Marks & Spencer, and return one day to its former glories. However, its serves as a warning to all lenders to ensure that their own money lending streams are based on a more balanced profile. " In the secured loans market a number of lenders have reduced their maximum loan to value, however the UK sub-prime loans and mortgage market is far more regulated and conducted in a much stronger way than as seen in the USA. In fact we are starting to see many new lenders appear in this market who will take advantage of adverse conditions elsewhere." ~ Steve Burnage |
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The overall cost for comparison is 10.8% APR variable. The actual rate will depend upon your circumstances. Ask for a personalised illustration. Our rates start from 7.9% APR variable. We also have a range of plans with rates up to 17.5% APR allowing us to help customers even with the most severe credit problems. If you are thinking of consolidating existing borrowing you should be aware that you will be extending the terms of the debt and increasing the total amount you repay. A fee of between 0% and 10% of the loan may be charged depending on credit history and ability to prove income. The amount of fee will depend on your circumstances, however, we estimate that it will be 5% of the loan amount.
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