The Post Office has said that it was dedicated to challenging traditional high-street lenders by offering competitive products that suited a variety of customer needs.
The three-year fixed deal is a 75 per cent loan to value mortgage at a rate of 2.48 per cent and has a £1,495 fee.
There is also a 1.98 per cent two-year fixed rate mortgage at 75 per cent LTV with a £995 fee which features in the best buy tables. Other new products include a 2.98 per cent three-year fixed-rate mortgage at 60 per cent LTV with no fee.
There is a 3.59 per cent five-year fixed-rate mortgage at 60 per cent LTV with no fee.
Buy-to-let offerings include a 3.75 per cent five-year fixed rate mortgage at 60 per cent LTV with a £1,995 fee and a 4.09 per cent five-year fixed-rate mortgage at 75 per cent LTV, also with a £1,995 fee.
The Post Office has been competing for a larger share of the mortgage market in the past few years. Earlier this year it launched a range for brokers, as well as signed up to the government’s Help to Buy scheme, recruiting more than100 mortgage specialists and re-entering the BTL market.
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.”
Reactions:
Provider view: Mr Willcock said: “At Post Office, we are always looking for opportunities to review our product range so that we can offer our customers the best mortgage possible. We recognise what an important and occasionally daunting process finding a new mortgage can be, and so offer several means of support so that people can buy in the way that suits them best.
“We are committed to offering customers the best deals and service across our full range of financial services products, whatever their needs. Whether they’re looking for a new mortgage, current account, or way to manage their savings, we recognise that no two customers are the same. By giving them the choice of contacting us online, over the phone or in one of our 11,500 branches we are able to cater to their needs.”
Adviser view:
Patrick Waller, managing director at Financial Planning Partners in Crowthorne, Berkshire said: “Post Office mortgages seem to offer competitive terms within its chosen market backed up by a very informative and useful web based presence.”
Charges: Early repayment charges and application fees vary depending on the type of mortgage, fees start at £0 and go up to £1,995.
Verdict: The Post Office has had to differentiate itself from National Savings & Investments which although not the financial arm of either Royal Mail or Post Office Counters – was seen as the Post Office’s unoffical financial arm. Deals like this may help differentiate itself and it can still rely on some goodwill for the brand. But it will have to keep up the deals if it is to woo borrowers away from mortgage market stalwarts in what is becoming an increasingly competitive field.
