Northern Rock forced to withdraw £99 mortgage fee

A recent promise by Northern Rock to introduce a reduced mortgage fee from yesterday has been withdrawn in the short term due to "technical difficulties". The company recently announced that the previous £250 fee would be reduced to £99 in an attempt to attract more business to the government, and taxpayer, owned operation.

While those who have applied for mortgages this week will be charged the £250 rate they will receive a rebate of £151 once the system difficulties have been resolved. It is thought that the reduced fee will attract significant interest in the UK mortgage arena at a time when Northern Rock needs to attract as much new business as possible. The company still owes UK taxpayers tens of billions of pounds and it will take some time for this to be repaid.

The demise of Northern Rock was seen by many as the first step in the collapse, or near collapse, of the UK banking arena. The very fact that a UK bank institution was virtually on the verge of collapse surprised and shocked many consumers leading to "a run on UK banks". Inevitably the government had to step in and commit billions upon billions of pounds of taxpayer's money to support the system.