Franky on Finance

Lloyds TSB has struck a three-year deal to take on Northern Rock customers who are coming to the end of fixed rate mortgage deals.  Certain mortgage customers will be offered the opportunity to switch to a Lloyds from July.  The deal will assist Northern Rock in reducing the size of its balance sheet.  Lloyds has set a maximum loan to value ratio of about 80% for the mortgages it will take on, but it said this will be flexible.  The tax payers obviously have the rough end of the deal here - as Northern Rock which is now state owned will be left with the riskiest borrowers, just as housing repossessions are expected to rise.  Northern Rock itself warned last month that arrears were rising and shifting customers could become more difficult as the economy worsens and rivals cut back on lending.