Northern Rock arranges mortgage switch deal with Lloyds TSB

NORTHERN Rock today announced a tie-up with Lloyds TSB under which its mortgage customers will be encouraged to switch to the UK's fourth largest lender.

Under the terms of the three-year deal certain Northern Rock customers coming to the end of fixed rate mortgages will be contacted and offered the chance to apply for a fixed rate loan with Lloyds TSB.

They will benefit from a fast-track application process, while Lloyds will also waive its £99 application fee and offer free legal and valuation work.

Northern Rock said the tie-up would safeguard 100 jobs at the recently nationalised lender, as these staff will be needed to run the dedicated switching service, which should be up and running by the beginning of July.

The group said the move was consistent with its aim of repaying the £24.1 billion its owes to the Bank of England by reducing the size of its mortgage book.

Customers with a clean repayment history and at least a 20 per cent deposit can apply, although there is no guarantee applications will be accepted by Lloyds.