The Post Office is extending its mortgage range to include 90% deals available to first time buyers.
From tomorrow, the Post Office will be offering two-year, three-year and five-year fixed-rate mortgages to borrowers with just a 10% deposit. The rates for the two-year fixed and five-year fixed deal are the cheapest on the market but come with an arrangement fee of £999 and an admin fee of £195. For some scenarios, depending on how much you’re borrowing, the deals will work out to be the cheapest on the market in terms of total cost.
The new range also includes a two-year, three-year and five-year fixed rate mortgage available to borrowers with a 15% deposit and all of these deals top the Best Buy tables in terms of overall cost based on a £200,000 property with a £170,000 mortgage.
Marco Hughes, Post Office director of lending said: ‘Whilst there are existing 90% deals available, many remain out of reach for most borrowers because the rates are too high. Instead, we’re offering more affordable rates that will allow more borrowers to take out a mortgage with a smaller deposit. This should particularly help first time buyers.’
No mortgage advice
Melanie Green, Principal Researcher at Which? said: ‘These new deals are great news for first time buyers as they increase the choice of deals available with a 10% deposit and represent good value too. The major drawback is that the Post Office doesn’t offer mortgage advice so borrowers will need to make up their own minds whether the mortgage is suitable for them or not’.
The Which? mortgage finder is an invaluable tool if you’re looking for a mortgage. Enter your own details and it will find the cheapest deals available based on the total cost of the deal, taking into account any fees. If you’re new to mortgages or just want a refresher on the different options available, take a look at our guides to mortgage basics and mortgage deals.
Which? Money when you need it
You can follow @WhichMoney on Twitter to keep up-to-date with our Best Rates and Recommended Provider product and service reviews.
Sign up for the latest money news, best rates and recommended providers in your newsletter every Friday.
Or for money-saving tips, and news of how what’s going on in the world of finance affects you, join Melanie Dowding and James Daley for the Which? Money weekly money podcast
For daily consumer news, subscribe to the Which? news RSS feed here. And to find out how we work for you on money issues, visit our personal finance campaigns pages.