Post Office looks away from best buy mortgages with new range

Tuesday, 20 October 2009 11:37

The Post Office has stepped into the mortgage market with a series of fixed rate mortgages and a tracker.

The move follows regional trial of Post Office Mortgages and the firm looks to widen its offering of financial products.

Information about the mortgages are available at all 12,000 Post Office branches, but customers will have to arrange a call-back from a mortgage specialist based in a call centre.

Staff will be available in 250 larger Post Offices.

The Post Office claims its standard variable rate (SVR) - or revert rate as it is called - is the best in the market being pegged a 1.99 per cent over the Bank of England base rate.

However, its main fixes and tracker are not among the best deals.

A spokesperson for the Post Office said: "We never intended to be a best buy.

"Following our trial we found lots of customers were looking at longer term and we had this more in focus."

She added this is why the five-year fix is closer to best buyers on the market.

She also flagged up the revert rate as offering more clarity than banks' SVRs - although she admitted its margin over base rate was subject to review and change.

Among the deals on offer is a 3.59 per cent tracker - up to 80 per cent loan-to-value (LTV) with a £599 fee (the standard fee on all its mortgages).

This compares to HSBC's 2.74 per cent term tracker, although this is limited to 60 per cent deals, according to best buy data from Moneyfacts.co.uk.

ING Direct has a tracker at 3.09 per cent and first direct is offer 3.49 per cent - at 75 per cent LTV and 80 per cent LTV respectively.

The Post Office's two-fixes are at 4.29 per cent for 60 per cent LTV and 6.29 per cent for 80 per cent LTV.

On the lower LTV first direct is offering a two-year fix at 3.69 per cent, while at 80 per cent Loughborough has 4.75 per cent.

On the five-year fixes the Post Office's 5.09 per cent deal at 60 per cent, runs close to Newcastle's 75 per cent deal at 4.99 per cent.

The Post Office mortgages are only available direct via the call centres or its website.

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