Northern Rock has followed other lenders and yesterday withdrew it's 125% mortgages. It will no longer offer this mortgage to new customers as it concentrates it's lending on low-risk customers and attempts to shrink it's book.
Many of the better quality loans in it's books are owned by another company, Granite, and are not part of the Nationalisation process. This along with customers who can moving away, leaves the bank with a poorer quality mortgage book for nationalisation.
Analysts are also worried about customers across the board with 100%+ mortgages where the deals are coming to an end shortly. Many of these will not be able to find new offers and could end up struggling to meet repayments. Only Birmingham Midshires still offers a 125% mortgage, and this is expected to be withdrawn.
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