LloydsTSB offers mortgages to certain Northern Rock customers
Lloyds TSB is set to accelerate its new business growth after agreeing a three-year deal with Northern Rock which will allow the nationalised lender's customers to switch to a Lloyds mortgage.
Under the terms of the deal, certain Rock mortgage customers approaching the end of their fixed rate period will be offered the opportunity to convert to one of Lloyds' fixed rate products.
The news comes as the European Commission calls for the bank to downsize its operations more aggressively as it looks to pay off its £27 billion government loan before the target date of 2010.
According to Lloyds TSB, the deal will allow it to increase its core UK business in a low risk manner and will aid Northern Rock to shrink the size of its balance sheet.
It is estimated that around 180,000 Northern Rock customers will come to the end of their fixed rate deals within the next three years.
However it made it clear they would not be offering deals to all Rock's customers, and would be applying its own strict lending criteria.
For every transfer completed, Lloyds said it would pay Rock an undisclosed fee.
Apparently Lloyds have said that Northern Rock customers switching across would benefit from free legal and valuation work and a waiver of the standard application fee.
Mortgage holders who choose not to switch will be able to stay with Northern Rock on their standard variable rate, or look for alternative deals.
Source citywire.co.uk
Debtwizard comment
To take advantage of this offer you will need to own at least one fifth of the value of your home (i.e. not look to borrow more than 80% of the house value.
Apparently Lloyds TSB will waive the £99 application fee and borrowers will have rates between 6.29 and 6.45 pc for five and two year fixed rate deals respectively.
Lloyds TSB also aims to make it a fast track process for all Northern Rock mortgage holders with a dedicated service. Letters will be sent out by Northern Rock over the next two years to those that currently have a mortgage with them and should arrive around three months before the end of the current deal.
As with all financial products read the small print and look around at several other deals before you sign up. Note that not all Northern Rockls customers will be offeried this deal and LloydsTSB will be applying its own strict lending criteria.
If anyone decides to go with LloydsTSB under this deal then I would like some feed back so that I can post other members through the site.