What’s new?

The Post Office has expanded its mortgage range to include new buy-to-let and residential mortgage deals, including a three year fixed deal at 75 per cent loan-to-value (LTV) with an interest rate of 2.48 per cent.

Other products on the residential side include a fee-free 2.98 per cent three-year fixed rate mortgage at 60 per cent LTV and a 3.59 per cent fee-free five-year fix at 60 per cent LTV.

On the buy-to-let side, the lender is offering a 3.75 per cent five-year fixed rate mortgage at 60 per cent LTV and a 4.09 per cent five-year fixed rate mortgage at 75 per cent LTV, both with a £1,995 fee.

They say…

John Willcock, head of Post Office Mortgages, said: “In a competitive market it is important to stand out, and with our rates and service offering we are able to offer customers an alternative to traditional high-street lenders, whether they’re looking for a residential or buy-to-let mortgage. We’re dedicated to ensuring customers feel they are in safe hands when it comes to taking out a new mortgage and hope that with these new rates they also know they are getting the best deal.”

Good news?

The Post Office’s latest range of mortgages are certainly competitive. Its two year fixed rate of 1.93 per cent for a 75% LTV is a little higher than HSBC’s 1.49 per cent offer (for 60 per cent LTV), but has a lower fee – £995 fee versus £1,999. In practice, many two year mortgages are now coming in under 2 per cent.

Again, the three year rates are up there with the most competitive. Chelsea has a three year fixed rate of 2.34 per cent for a max loan to value of 65 per cent, but again, product costs are higher.

The five year deals – including one under 3% – also propel the Post Office to near the top of the best buy tables.

Any caveats?

The Post Office mortgages are provided by the Bank of Ireland, so its claims to ‘challenge high street lenders’ could be questioned. Also, last year the Bank of Ireland sparked controversy when it told 13,500 UK customers on tracker mortgages that it planned to increase the margin on their loans. The Bank eventually reversed the decision in the face of customer protests but it left a nasty taste for many customers.

Links
http://www.postoffice.co.uk/mortgages
Helpdesk: 0345 611 2970