The rate on its two-year fixed-rate mortgage at 80 per cent loan-to-value has been reduced from 2.55 per cent to 2.38 per cent, and on its two-year fixed mortgage at 85 per cent LTV from 3.29 per cent to 2.89 per cent. The rate on its three-year fixed mortgage at 85 per cent LTV has also been reduced from 3.59 to 3.29 per cent.
Other new rates include a three-year fixed rate of 2.45 per cent at 75 per cent LTV and a three-year fixed rate of 2.74 per cent at 80 per cent LTV.
Four-year fixed rates include 3.09 per cent at 75 per cent LTV, 3.39 per cent at 80 per cent LTV, and 3.75 per cent at 85 per cent LTV.
The new five-year fixed rate is 4.45 per cent at 90 LTV.
The Post Office said it has put its stamp on the mortgage market this year, offering some of the most competitive mortgage deals in the market.
Customers are given priority and offered the best range possible, according to the lender.
PROVIDER VIEW
John Willcock, head of Post Office mortgages, said: “Our five-year fixed-rate mortgage at 4.45 per cent (90 per cent LTV) is ideal for first-time buyers. Getting a foot on the first rung of the housing ladder can be a real struggle and saving for a deposit is often the biggest hurdle. Deals that require a smaller deposit can go some way to easing the strain. We also offer our customers a range of ways in which to choose their deal; for example, our mortgage specialists in branch give customers support as they navigate through what can sometimes be an overwhelming process.”
ADVISER VIEW
Dean Mason, practice principal of Broxbourne-based Masons Financial Planning, said: “At 75 per cent and 80 per cent these deals are competitive, if not earth-shattering. And fees, while a little high on the three-year deals, are broadly in line with the marketplace. I would be interested to see if five-year options are available – and equally competitive – at these levels of deposit as this is the most popular and recommended deal term for most at present. Many are reluctant to fix over three or four years as it may mean jumping right into rising rates at the end, whereas five years gives a little more time for them to adjust their finances.
The rates at 85 per cent, particularly, and at 90 per cent really are great news as they pass the benefit on to borrowers so often missed out. Overall, a really positive move, but needs to be backed up by sensible underwriting criteria and, of course, it would be wonderful if the Post Office embraced the intermediary market.”
CHARGES
The arrangement fee on the two-year fixed rate mortgages at 80 per cent LTV and 85 per cent LTV, along with the three-year fixed mortgage at 85 per cent LTV, is £995. The three-year fixed rates of 2.45 per cent at 75 per cent LTV and 2.74 per cent at 80 per cent LTV attract a fee of £1495. All the four-year fixed rates and the five-year fixed rate attract the same fee of £995.
VERDICT
The Post Office’s latest rate reductions offer good value deals for a first-time buyer or those looking to move. The Post Office is a respected organisation with a good reputation and, combined with these competitive rates, these mortgage offerings should prove an attractive option for today’s cash-strapped homebuyers.
