Smash hit

Will my mortgage with Northern Rock be affected?

Unlikely. If Northern Rock is broken up or sold, the buyer is legally obliged to take on its mortgage book

What could be the bill for taxpayers?

So far, Northern Rock has borrowed about £24 billion from the Bank of England, which, essentially, the taxpayer is underwriting. But it has posted collateral against the debt, which should mean, in theory, that it can repay the loan at any time the Government chooses to push it into bankruptcy. The difficulty is that the Government has been deeply reluctant to push the “nuclear button” on Rock after spending so much effort trying to keep it going. Without drastic measures, however, the Rock will continue to represent a huge unknown risk for taxpayers. That is why nationalisation looks like such an attractive option

Can I take out a new mortgage with Northern Rock?

Yes. New customers and those already with Northern Rock but coming to the end of their fixed-rate deals can take out a mortgage with the lender. However, brokers say that this may not be a sensible option because Northern Rock is not offering the best deals

Are my savings with Northern Rock safe?

Yes. At present, Northern Rock is borrowing money from the Bank of England to fund its loans. The Government is also guaranteeing all its savings accounts. The Treasury said yesterday: “Savers in Northern Rock can be reassured that their money is safe”

Will the Bank’s loan continue if Northern Rock is bought or broken up?

The Bank of England credit facility expires in February and the loan will not be available automatically to the new owners. However, the Bank of England and the Government are willing to discuss the possibility that the loan can be renewed. If Northern Rock is nationalised, then all deposits will be backed by the Government

Is Alistair Darling’s position safe?

It would be disastrous for Gordon Brown to lose his Chancellor so early into his premiership. In September Mr Darling conceded that his reputation was on the line. Opposition MPs say that he should resign if taxpayers end up footing the bill

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