Interest increase by Northern Rock
Northern Rock are looking to increase its range of fixed-term
mortgages for borrowers with inconsistent credit histories.
Their sub-prime home loans by 29th August will cost up to 1.25%
more. Loans related with the Bank of England's base rate will
all be executed.
Marketing director Justin Urquhart Stewart, at Seven Investment
Management, commented; "Northern Rock is heavily reliant on the
wholesale money markets for funding its mortgages, rather than
"These have become more expensive lately, which is squeezing
profit margins at the company."
Analysts have witnessed the move as part of a broader-scale retreat
from sub-prime mortgages in the UK, as financial institutions
line each other alongside a duplication of the catastrophe that
has cleaned off billions of dollars of US mortgages.
Victoria Mortgages, a UK sub-prime lender withdrew its range
of loans to potential borrowers at the start of August.
The firm are known to launch its products by the end of the month
after escalating the cost by 2.5%, explained financial website
Different lenders, such as Mortgages plc and GMAC-RFC, also increased
their rates on selected products.
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