'System error' halts bank's £99 mortgage fee

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The Independent Online

Nationalised bank Northern Rock has been forced to withdraw its £99 mortgage application fee due to a technical problem, it emerged today.

The group had planned to launch the reduced fee for fixed rate, tracker and buy-to-let mortgages for people buying a property from yesterday.

But it has had to delay introducing the new charge due to what it described as an "internal system error".

However, the bank has promised to honour the reduced fee for people who applied for a mortgage yesterday.

It hopes to introduce the £99 fee for other customers as soon as possible, but in the meantime they will be charged at the previous rate of £250.

A Northern Rock spokesman said: "Regrettably, due to an internal system error, this change has been postponed.

"Some of our external suppliers' systems displayed the application fee at £99 during yesterday. Therefore, for all customer applications submitted on Monday August 23 for purchase and buy-to-let products, the application fee of £99 will be honoured.

"Those purchase and buy-to-let applications received after close of business on Monday August 23 will be charged an application fee of £250 until the reduction to the application fee is implemented."

David Hollingworth, of mortgage brokers London & Country, said: "It's unfortunate that they announced this in a blaze of publicity and have now found their systems are too inflexible to cope.

"This creates a bit of a dilemma for homebuyers but the risk of waiting for the £150 reduction in application fees to be restored is that other factors in mortgage deals may be repriced in the interim and cancel out any savings."

But he added that it is good Northern Rock still plans to introduce the lower fee when it can.

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