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Lender says...

Northern Rock has repriced its residential mortgages in a range available exclusively to new customers. Headline rates will be available to customers with a 25 per cent deposit. The previous maximum loan-to-value ratio for Northern Rock's lowest tier was 70 per cent LTV.

Residential purchase mortgages for new customers offers a choice between two-year and five-year fixed rate products with either a £995 product fee or a fee saver option.

A two-year fixed rate product is available at 6.24 per cent up to 75 per cent LTV with a fee or at 6.54 per cent with the fee saver option.

Up to 80 per cent LTV the rate is 6.69 per cent with the £995 fee or 6.99 per cent without.

The product is available up to 90 per cent LTV at a rate of 7.39 per cent when the fee is paid or at 7.59 per cent without the fee.

The range also includes remortgage products offering free basic valuations and free standard legal costs. Customers looking to remortgage to Northern Rock from their current provider will have the choice of two-year and five-year flexible fixed rates, with either a £995 product fee or fee saver option.

A two-year fixed rate is available at 6.34 per cent up to 75 per cent LTV with a £995 fee or at 6.64 per cent with the fee saver option.

Adviser says...

Danny Lovey, proprietor of Essex-based adviser The Mortgage Practitioner, said: "It is an absolute disgrace the government-owned Northern Rock is being allowed to tout for new business at the expense of the taxpayer and their unfortunate mortgage borrowers who are not in a position to move away from Northern Rock because of the current mortgage criteria.

"These customers, particularly the Together borrowers, are paying an interest rate of Northern Rock's 7.49 per cent, which is 0.5 per cent higher than the average for the leading mortgage lenders. Existing customers at the standard variable rate are not being offered any other deals at all.

"Not only are the current mortgage holders subsiding Northern Rock touting for new business, but the first priority should be that Northern Rock repay to the Treasury the money owed."

Rating: 2/5 stars