If a U.K bank collapsed

[jkelly24]

Just out of curiosity if a U.K bank collapsed our savings are protected up to a certain amount but what would happen if you held a mortgage with that bank? Many thanks in advance

[sandyRoe]

You'd still have to pay it. Think back to Northern Rock a few years ago.

[riptide]

Same as Northern Rock, all the mortgages were maintained by the Government and then would be taken over by whatever party eventually takes over the Bank.

[hc4361]

Your mortgage is an asset of the bank - other banks would be willing to "buy" it if the government didn't step in.

[jkelly24]

Thanks everyone didn't think for a minute SandyRoe I would get away without paying it!

[sandyRoe]

I wasn't suggesting that you were. But, it's a nice thought, no more mortgage.

[ValenS]

I haven't actually looked into this but if it follows the same principles as an ordinary business becoming insolvent (and the government doesn't bail them out) then whoever takes over administration of the debts will try to achieve the best results for the creditors - whether this be through calling in the assets and selling them off, accepting offers to unattach the debt (e.g. for full market value or at a percentage) or in certain cases simply ignoring the debt as it would be uneconomical to chase. It will vary according to the individual circumstances of the financial institution in question and I doubt that the government will allow it to happen as a worst case scenario but it certainly is less than ideal whatever happens.
Valen from http://britainloans.co.uk/cash-loans-uk.html