by Mark Johnston
Post Office Cuts Fixed Rate Mortgages!
It seems that if you pop in to your local Post Office you will now be offered an array of financial products alongside your book of stamps and passport application.
The Post Office is a financial services partner of the bank of Ireland personal finance limited, which is part of the bank of Ireland group.
Mortgages are also part of the Post Office’s financial products, they primarily offer mortgages to those potential borrowers who have at least 25 per cent equity in their homes.
It offers both tracker and fixed rate products.
Mark Harris, chief executive of mortgage brokers SPF Private Clients, says “with a wide range of deals for different levels of deposit and various fee options, there is something for most borrowers”.
Just recently the lender has launched its best ever mortgage rates with a range of market leading reductions on fixed rate products.
This new range will appeal to first time buyers as well as ‘second steppers’.
Many of these deals are also promoted as arrangement fee free, but this however does not mean there are no charges.
It appears that the Post Office charges a £195 lending fee and borrowers will also still be expected to pay for their legal and valuation fees.
John Willcock, head of Post Office Mortgages, says “the new mortgage rates are our best ever and offer a range of deals for potential home buyers, whatever their situation”.
The new rate reductions include:
A two year fixed rate at 3.19 per cent on 80 per cent loan to value (LTV) ratio, this come with no arrangement fee.
A two year fixed rate at 3.49 per cent on 85 per cent loan to value (LTV) ratio, which also come with no arrangement fee.
There are also a couple of five year fixed rate products available one with a rate of 2.85 per cent and another with a rate of 3.69 per cent on either 75 per cent or 85 per cent loan to value (LTV) both come with fees of £995.
Second time buyers who wish to remortgage could benefit from the lenders new two year fixed rate deal at a rate of 1.70 per cent with a 60 per cent loan to value (LTV), this has a hefty £1,995 fee.
Although experts believe that the high fee that comes with this deal will immediately put some customers off, especially those who are attracted by incentives.
Rachel Springall, from Moneyfacts, the financial information service, said “the two year fixed rate at 1.70 per cent offers the best mortgage rate. It is 0.01 per cent off the market leading price”.
However, according to some industry insiders mortgage rates could potentially fall below 1.5 per cent when and if new lenders arrive on the market in the coming months.
The other thing potential borrowers should remember is that because the Post Office is linked to the Bank of Ireland it may also find itself in ‘exceptional circumstances’ and has the bank of Ireland did change their original terms, thus adversely affecting customers.
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