The chief executive of the Royal Bank of Scotland has announced that struggling mortgage customers will be given six months' grace before repossessions begin.
Royal Bank of Scotland (RBS) mortgage customers who find themselves struggling with repayments will be given six months' grace before repossessions start, its chief executive has announced.
The government had asked banks to give customers three months to get their finances in order before beginning repossession proceedings - which should only be used as a last resort. However, Stephen Hester, writing in the Financial Times, revealed that RBS - which also owns NatWest - would be "even more helpful" by doubling the moratorium period.
This guarantee will remain until the end of 2009 at least and will be for all customers, including NatWest mortgage holders and those who are already in arrears.
"We need to recognise our customers' needs and fulfil them where we can. Not because of any moral pressure - although we understand it - but because it makes commercial sense," he wrote, adding that any customers with concerns should talk to the bank as soon as possible.
Mr Hester also admitted that some customers were seeing borrowing costs rise against the base rate. He claimed that this was a "necessary reflection" of the large increases in RBS's costs of borrowing, before reminding consumers that "an interest rate cut for borrowers is an income cut for our savers".
