Northern Rock still faces large amounts of mortgage lending funding commitments at its previous competitive rate, according to John Charcol senior technical manager Ray Boulger.
He told the round table meeting that this is on the basis that the average time for an application to complete is 10 weeks and Rock only started to be uncompetitive until six weeks ago.
Boulger said: “So at this point in time, it will still be funding a lot of mortgages. This will obviously start to dwindle in a couple of weeks time but it still has a lot of commitments over the next few weeks.”
He said John Charcol was still happy to place business with Northern Rock as long as the criteria are suitable for the client. But he admitted that at the moment, Charcol is giving the lender little business due to its rates being generally 80 to 100 basis points above more competitive leaders.
“Normally, it does not have market-leading rates but sometimes it is worth paying a bit more on the premium to get the flexibility but definitely not at 80-100 basis points more,” he added.
Boulger said Northern Rock has said it is going to keep its business development managers but it will be changing its bonus targets for the last quarter.