Northern Rock halts 100% mortgages together deal

100% mortgages lender Northern Rock has decide to pull out of the high risk 100% to 125% mortgages market. This type of loan has been a favourite of many borrowers who have used this 100% mortgages product to secure a property and get a loan.

The 100% mortgage product has been criticised for encouraging people to take on larger loans. The reality is most people were just consolidating existing loans and getting the same rate as their mortgage. In a rising mortgage market this concept worked very well. As the property was increasing in value this gave the owner a sense that existng loans were being paid off.

Tens of thousands of Northern Rock customers may eventually be forced to remortgage at much higher interest rates when their current offers expires many two fixed rates at 5.99% will be coming to an end in 2008.

“Our present lending appetite has changed,” said a bank spokesman.

“And demand for this product has now fallen to negligible levels, so we are withdrawing it,” he added.