Where next for Northern Rock borrowers?
The spectre of negative equity – not seen since the early 1990s – raises serious problems for borrowers coming to the end of their deals with the bank. “Unfortunately there are just no deals available at 100% LTV available anymore,” says David Hollingworth, a broker at London & Country. “Northern Rock borrowers who are coming to the end of their mortgage term will be faced with two issues – they may be able to move their mortgage elsewhere, or they will have to accept the higher standard variable rate repayments and tighten their belts.” But it was not just Northern Rock that offered higher loan to value mortgages. According to Louise Cuming, head of mortgages at Moneysupermarket.com, other lenders that offered these mortgages included Alliance & Leicester, Birmingham Midshires, Abbey and Coventry Building Society. “This raises the bigger question of just how many borrowers out there are facing negative equity?” she says. “And it’s not just those with 100% mortgages either. Those borro
