Northern Rock mortgage borrowers 'don’t need to worry yet'

Borrowers with Northern Rock will see no changes to their monthly mortgage repayments but should shop around when it comes to remortgaging.

That is the view of independent mortgage experts who have reassured borrowers with the ailing bank, which was nationalised this week, they will not be subjected to any unexpected rate hikes.

In fact, according to one commentator, borrowers are the "least troubled" of all those involved financially with Northern Rock.

Rachel Lacey, editor of Moneywise magazine, said: "To be honest borrowers and savers don't need to worry at this stage – it's shareholders that have suffered really, they are the victims in this."

She urged the bank's borrowers not to worry at this stage and advised them when their mortgage deals expired and it was time to remortgage to shop around the entire market.

This is sound advice, especially amid criticism Northern Rock's products are less than competitive.

Katie Tucker of mortgage broker John Charcol said the bank should at least launch some low loan-to-value prime mortgage products to attract low risk business or to try and retain the lower-risk mortgages on its books.

Otherwise, she warned, the bank might be left with lots of risky loans and nothing of "real quality" on its books in two or three years time.

But Ms Tucker also sent out reassurances to mortgage borrowers with the bank. "If you have a fixed-rate the payments won't change and if you are on a tracker they are obliged to track the Bank of England bank rate regardless – so you are protected," she said.