Earlier this month the nationalised bank, Northern Rock, was accused of making ‘obscene’ profits from its mortgage customers.

According to an official from one consumers campaign group the lender is making huge profits through abandoning its social duty as a nationalised bank that is funded by taxpayers, and is charging extortionate rates to mortgage customers.

At the time of the report, which was released by the consumer campaign group Which? earlier this month, the bank was charging nearly ten times the amount of the 0.5 percent base interest rate on its standard variable rate mortgage.

An official from Which? said: ‘When you have an SVR that is 4.79%, it is frankly an obscene profit margin.’

He added: ‘Those people are getting penalised with outrageously high SVRs. Northern Rock has a range of responsibilities, one of which is now a social responsibility. We need to see that carried through.’

In his speech the Which? official also attacked other lenders for hiking up their administration fees and various other charges at this particularly volatile time. It was claimed that many lenders have done this so that they can increase their profits in order to recoup financial losses that have been incurred since the onset of the global credit crunch.

With regards to Northern Rock mortgages, many of its customers that are currently on special deals are due to come off them this year, and will then have to switch to the standard variable rate.

A Northern Rock official stated: ‘It is important to note that the majority of customers coming to the end of fixed rate mortgages this year, over 90%, are seeing reductions in their interest rate as they move onto SVR, and so their monthly payments actually go down.‘

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