£99 mortgage fee withdrawn by Northern Rock

Northern Rock, one of the first major UK victims of the global credit crunch a few years ago, recently announced that it was launching a £99 mortgage fee in order to attract more business. The troubled bank, which was nationalised following the problems it experienced, became the first victim of a run on a British bank for over a century and a half previously. For many the near collapse of the bank marked the start of the near collapse of the whole financial system in the UK, which is still struggling to get back on its feet in many ways.

The £99 fee mortgage may have proven a hit amongst those that wanted to escape having to pay the usual hundreds of pounds for the mortgage fee. However, the provider has announced that it is now going to have to withdraw these £99 fee mortgages due what it has described as ‘technical difficulties’.

The previous fee on the mortgages with Northern Rock came to £250, so the reduction took the fee to less than half the original amount charged. Those applying for a mortgage at present will be charged the full £250. However, officials from Northern Rock have said that they will be refunded £151 once the difficulties have been resolved, which will bring their fee back down to £99.

The bank still owes the taxpayers billions of pounds, and therefore needs the increased business that the promotion would have brought in order to try and bring its massive debt down. However, the short term withdrawal of the promotion could have a profound effect on the profits that the lender expected to make from offering the low fee mortgages.