by Mark Johnston
The Post Office Reduces its Mortgage Rates Again!
Just recently the Post Office has announced further cuts to a number of its fixed rate and tracker mortgage products.
This particular announcement appears to take five of their two and three year fixed rate and tracker deals to the top of the mortgage best buy tables.
John Willcock, Head of Post Office Mortgages, said “The rates on many of our products have been significantly reduced, while some are also fee free. Buyers are on the lookout for good deals and our new rates are right at the top of the best buy lists.”
The Post Office is now offering for those borrowers with a 25 per cent deposit, a two year fixed rate at 2.19 per cent, or three year fixed rate at 2.38 per cent. Both have a £995 fee and a lending fee of £195 which can be deferred until the mortgage is fully repaid.
However for those borrowers with a smaller deposit of 20 per cent they could access a rate of 2.74 per cent for two years.
These products revert to a rate of 3.99 above base, currently 4.49, at the end of the deal
Some mortgage experts believe that theses 80 and 75 per cent loan to value (LTV) fixed rate deals on offer are realistic options for first time buyers and those without high levels of equity to lay down. Although it is also worth remembering that in two and three years time these terms will expire and this is before many people expect rates to rise, meaning then borrowers should also check out tracker mortgage rates for comparison.
The lender has also launched a 60 per cent loan to value (LTV) two year tracker of 1.44 above base, currently 1.94 and has cut the rates on its 75 per cent loan to value (LTV) fee free two year tracker to 1.69 above base, currently 2.19 per cent.
Both of these deals then revert to the standard variable rate (SVR) of 3.39 above base, currency 4.49 per cent and have early repayment charges of 3 per cent.
Industry experts suggest that the Post Office’s 60 per cent loan to value (LTV) two year tracker and 75 per cent loan to value (LTV) fee free two year tracker will be attractive to those borrowers who are seeking to track a low rate for a couple of years, but for a slightly higher rate they could get an early repayment charge free lifetime tracker from Santander at 2.69 per cent.
All this said it is also worth remembering that Post Office mortgages are funded by The Bank of Ireland who have recently not kept their promises as they raised tracker rates even though the bank of England had not changed theirs.
A spokesperson for the lender states that “the diversity of our range means whether you are a first time buyer or looking to move, the Post Office can offer you the deal that is best for you.”
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