Number of competitive mortgages 'set to increase'

Date:Wednesday 25th November 2009
Author: Max Freedman

The "aggressive pricing" of mortgages by Northern Rock will lead to other institutions increasing their lending, in the opinion of one mortgage expert.

Ray Boulger, senior technical manager at John Charcol, said that Northern Rock has competitively-priced its mortgages in an attempt to increase its gross lending.

He stated that in the first three quarters of this year, the mortgage provider has lent £2.3 billion gross.

"Their target for the whole of the year is £4 billion gross, which I suspect they will struggle to achieve. Their target for next year is £9 billion," Mr Boulger added.

For the institution to reach this target, it must up their lending by up to £6 billion in a market where net lending at present is at £8 billion, he believes would result in a significant move.

The comments came after Moneyfacts released figures earlier this month that the average rate on two-year fixed rate mortgages has dropped, falling below five per cent for the first time in four months.