Consumers that took out a variable loan with a certain bank are now finding that they have few options when it comes to getting a better deal now that rates are high. Although flexible loans can be popular right now, those that went with the wrong lender for their flexible loan are feeling the pinch.
Melanie Bien, director of London-based Savills Private Finance, said: “It seems to me that those who took out a Together mortgage have been left with very few options and they are stuck on an expensive standard variable rate. There is a real lack of choice out there and these people have become the forgotten few. There is a danger that Northern Rock is focusing on paying back the loan and is forgetting the bigger picture. Perhaps some money could be used to help people.”
Louise Cuming, head of mortgages for price comparison website Moneysupermarket, said: “Northern Rock finds itself in a position where it will be lumbered with its higher risk borrowers who cannot remortgage elsewhere. So as its lower risk borrowers move on, Northern Rock will find its book contains an increasing percentage of the most vulnerable borrowers who are struggling to make their repayments.”
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