Northern Rock - Remortgage?

Question

Hello all,

Just need some advice...

Have a Northern Rock 5 year fixed rate mortgage (ends Feb 2011) with early redemption charge. What do you folks think about jumping mortgage lenders at this point in time considering the fact that there may not be a buyer, or that JC Flowers/Cerberus/Lloyds TSB buy them out? Also if they go into administration - how will this effect mortgagees?

Thanks in advance,
K

Answer 1

I suggest that you do nothing.

If they go into administration then the early redemption charge could not be enforced, as you have not asked to close out the mortgage.

If someone else buys them out you have nothing to lose, just a different name on their letterheads.

Ian M

Answer 2

Why pay an early redemption charge?
Can you find a better rate that will cover the early redemption charge. You will still owe the outstanding mortgage to the administrators.

Answer 3

Heed Ian M's advice. Do nothing. Northern Rock is having difficulty because panicking investors i.e holders of savings accounts, are withdrawing their money (which was always safe) and are now unable to invest themselves. Remember, banks have been lending each other money for as long as they've been in existence, and the fact that Northern Rock borrowed money from the government instead of another bank should be of no significance to savers, investors and mortgage holders.