Northern Rock mortgage holders need not worry

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Thursday 21st February 2008

The nationalisation of Northern Rock poses the least amount of risk to the financial services providers mortgage customers, it has been suggested.

Rachel Lacey, editor of finance publication Moneywises online presence, explains that other groups of clients might have more reason to be concerned.

For mortgage holders, though, she says: "When the time comes around for them to remortgage they need to shop around across the whole of the market."

The editor adds that such activity is the case with all borrowers, whether they are customers of Northern Rock or not.

However, those with savings could see their rate "slip" in the coming months if the organisation is unable to retain its competitive edge, she warns.

Such people could also be well advised to shop around to ensure they remain on the most profitable deal available to them.

But Ms Lacey claims there should be plenty of Britons willing to sign up to new savings products from Northern Rock.

She explains that the organisation has "the best protection" should a run on other banks take place.

"Money in a Northern Rock savings account now is safer than in any other bank on the high street," she comments.

This is due to the government having extended protection to include 100 per cent of the balance of savings accounts with the institution.

As a three-month notice period is required of Northern Rock before the guarantee is lifted, this could help accounts with the bank to remain a tempting proposition for many Britons.

"To be honest, borrowers and savers dont need to worry at all at this stage - its shareholders that have suffered really," Ms Lacey asserts.

She concludes that those with shares in Northern Rock may have learned of the dangers inherent with investing in a single company. ADNFCR-8000200-ID-18478131-ADNFCR ©