Lloyds TSB to pick up Northern Rock’s best borrowers
by Gill Montia
Lloyds TSB has entered into an agreement with Northern Rock which means that customers of the nationalised bank will be directed towards Lloyds TSB when their fixed-rate mortgages come up for renewal.
For the next three years, certain Northern Rock borrowers will benefit from a fast-track application process with Lloyds TSB and will not be required to pay the bank’s usual £99 application fee.
It is understood that customers making the switch will also have their legal and valuation fees covered.
Lloyds TSB will only be interested in taking on good quality debt, so those with poor repayments histories and a low level of equity in their properties probably need not apply.
The bank, which currently has an 8.5% share of the UK mortgage market, will be seeking to grow with low-risk new business.
The affiliation of lenders may secure around 100 jobs at Northern Rock as staff will be needed to oversee the switching process.
When Northern Rock hit its funding crisis last August, Lloyds TSB attempted to buy the bank but the Bank of England and the Treasury rejected its approach because of competition issues.