Post Office mortgages leading the way

It looks like the great British Post Office is leading the way with some of the most competitive mortgage products on the market when they recently introduced rate cuts.  Coming from a well respected institution the Post Office mortgages offer not only a great deal for both first time buyers and home movers but acts as a wake up call to the mainstream high street lenders.

First time buys still need to come up with a 20% deposit but as we move forward it would be good to see if the Post Office will review that criteria and nudge up the LTV to 90%.

One potential upfront saving with the Post Office deals is that there is no higher lending charge on any of the products.  This is a fee a lender uses to purchase an insurance policy for themselves to protect against the borrower not meeting the mortgage payments.

The Post Office is offering 2, 3 or 5 year fixed rate deals and tracker deals for the duration of the mortgage.

Fixed Rate

60% LTV

2 year               3.15% until 30/06/2012            3.49% (base rate + 2.99%)

Arrangement Fee: £999

Overall Cost Comparison 3.6%

3 year               4.09% until 30/06/2013            3.49% (base rate + 2.99%)

Arrangement Fee: £999

Overall Cost Comparison 3.8%

5 year               4.59% until 30/06/2015            3.49% (base rate + 2.99%)

Arrangement Fee: £999

Overall Cost Comparison 4.1%

75% LTV

2 year               3.15% until 30/06/2012            3.49% (base rate + 2.99%)

Arrangement Fee: £999

Overall Cost Comparison 3.6%

3 year               4.09% until 30/06/2013            3.49% (base rate + 2.99%)

Arrangement Fee: £999

Overall Cost Comparison 3.8%

5 year               4.65% until 30/06/2015            3.49% (base rate + 2.99%)

Arrangement Fee: £999

Overall Cost Comparison 4.2%

80% LTV

2 year               3.99% until 30/06/2012            3.49% (base rate + 2.99%)

Arrangement Fee: £999

Overall Cost Comparison 3.8%

3 year               4.85% until 30/06/2013            3.49% (base rate + 2.99%)

Arrangement Fee: £999

Overall Cost Comparison 4.1%

5 year               4.84% until 30/06/2015            3.49% (base rate + 2.99%)

Arrangement Fee: £999

Overall Cost Comparison 4.3%

Tracker – lifetime of mortgage

 60% LTV

Base Rate + 2.49%      currently 2.99%

Arrangement Fee: £999

Overall Cost Comparison 3.1%

75% LTV

Base Rate + 2.69%      currently 3.19%

Arrangement Fee: £999

Overall Cost Comparison 3.3%

80% LTV

Base Rate + 3.09%      currently 3.59%

Arrangement Fee: £999

Overall Cost Comparison 3.8%

Post Office mortgages are now very competitive and will pushing the traditional lenders to look closely at their rates, which can only be positive for the market.  With other new players moving into this market the future looks even more interesting.