Customers of the nationalised bank are coming to the end of fixed rates but when they look for another mortgage are met with higher rates, and the news that 100 per cent mortgages have become a thing of the past, with only customers who have at least 10 per cent as a deposit being given the most attractive deals.

Homeowners who have borrowed 100 per cent or more of their property’s value will be hardest hit, as very few lenders now offer such deals, and Northern Rock itself is trying to dissuade a large portion of its customer base from staying with the bank as it undergoes a considerable downsizing.

Approximately 200,000 people took out Northern Rock’s Together mortgage which allowed them to borrow up to 125 per cent of their home’s value. For those who cannot find the funds needed to bridge the gap between their old fixed rate mortgage and a remortgage deal, there will be little other choice than to stay with the lender at its inflated interest rate of 7.49 per cent.

In June, people who felt abandoned by Northern Rock were offered a ray of hope in the form of Lloyds TSB, which agreed to give its customers a remortgage deal.

However, only homeowners who hold 20 per cent equity in their property are considered, and Lloyds TSB has been accused of only taking people who are low-risk, leaving others vulnerable to the elements.

Northern Rock’s mortgage customers are finding that their monthly repayments have risen by hundreds of pounds, the worst hit being those who are now falling into negative equity, where they owe more than they own.

© Fair Investment Company Ltd