Post Office Cut Their Mortgage Rates!

by Mark Johnston

Post Office Cut Their Mortgage Rates!

The start of 2013 has seen an avalanche of lenders offering mortgage rate cuts.

Lenders have been tempting borrowers with a range of cuts to fixed rate mortgage deals and the lowering of mortgage fees.

post-officeTherefore, amid the ongoing mortgage price war it appears that the Post office has also stepped up their game.

 The lender launched their mortgage service in 2007 and has since won a number of industry awards.

The Post Office, who is partnered with the bank of Ireland, has recently announced its lowest ever two, three and five year fixed rate deals which come into immediate effect.

Some research has shown that the decision by the Post Office to drop some of their mortgage rates to below 3 per cent comes just a couple of months after First Direct introduced a fixed rate deal at just 2.99 per cent.

The largest cut is to its two year fixed rate at 90 per cent loan to value (LTV) by 1.24 per cent, which means the rate goes from 5.59 per cent to 4.35 per cent. This product has a £995 arrangement fee.

The cheapest rate it has is also for a two year fixed rate mortgage, down to 2.35 per cent for 60 per cent (LTV) borrowers, though this has a hefty £1,495 fee.

Post Office’s lowest ever three year fix comes with a rate of  just 2.75 per cent with a loan to value (LTV) of 60 per cent.

In addition to this deal the Post Office’s lowest ever five year fix on a 60 per cent loan to value (LTV) come with a rate of 2.89 per cent.

All of these deals come with a hefty £1,495 arrangement fee.

 However, the Post Office has also announced cuts to mortgage fees. The Post Office now offers 12 products with no arrangement fee or booking fee. Eight of these also have free standard valuation and free standard legal fees for those applying to remortgage.

Their three year fixed rate at 3.25 per cent deal with a loan to value (LTV) of  75 per cent  comes with no arrangement fee and is therefore the best in market with no fee.

Clare Francis, site editor at MoneySupermarket, said: “Although it has no application fees, the offer doesn’t include valuation or legal fees, so anyone looking to take this product needs to bear that in mind.

Industry experts feel that the huge reduction  the post office have made to the rate on their two year fixed rate, which requiries just a 10 per cent deposit, is very first time buyer friendly and will therfore provide a helping hand for those looking to step on the property ladder.

John Willcock, head of Post Office Mortgages, said: “Our commitment to our customers is fundamental to us and this is reflected in the service and rates we are able to offer which appeal to all types of borrowers, whether they are a first time buyer with a small deposit, a mover or a remortgage customer with more equity.


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