Northern Rock - plans to lend a extra £5bn this year - 24th February 2009

Author: Jeni Browne Posted on: 24 February 2009

Northern Rock is to revive its mortgage lending with extra cash from the taxpayer. This is part of government plans to boost lending generally, and reverses its earlier policy of winding down the bank's loans.

So what does this mean to borrowers?  Firstly, those already with Northern Rock mortgages will now be offered products to remain with the lender.  Previously, Northern Rock had been actively encouraging borrowers to go elsewhere by not offering a retention rate when their deal ends - the Rock had been taking this course of action so that it can reduce its existing mortgage book and start repaying the Governement some of the money it had borrowed - a impressive £18bn has already been repaid. 

Secondly, and this is the really good news, this indicates a definite change in attitude from the Government, as they have, it appears, acknowledged that there is a genuine need in the market, for increased lending capacity amongst the banks.  And with other lending institutions under the Governments financial wing, it could well be that we see a similar shift for other providers shortly.

For those of you who read these blogs on a regular basis, I am sure you will agree that things are looking up more and more for the residential mortgage seeker.