The best rates on Post Office mortgages

The Post Office used to be a place to queue endlessly behind a long line of nice old ladies collecting their pensions. Now it's a major financial institution in the High Street. We checked the rates on Post Office mortgages.

The Post Office (www2.postoffice.co.uk) offers a range of tracker and fixed rate mortgages to suit your needs. If you are concerned about rising interest rates, secure peace of mind by opting for a fixed rate, although at the moment, tracker options will provide lower monthly repayments.

Fixed rate deals allow you to borrow up to 90% of the purchase price at a fixed rate over 2 years, 3 years or 5 years. The 2 year fixed rate deal of 3.59% for borrowers with a 25% deposit means that for a mortgage of £250,000 over a 25 year period would require monthly repayments of £1264, assuming a capital and interest repayment plan.

There is a £950 arrangement fee for this mortgage. If you want zero fees, the interest rate is 3.89%. Fixed rates for longer periods are available, with 4.39% over 3 years, and 4.99% over 5 years, and rates are higher for borrowers with smaller deposits.

Tracker deals require a minimum of 10% deposit, and are available initially over a period of 2 years. Rates for a 75% loan to value (LTV) mortgage are 2.85%. This means that for a mortgage of £250,000 over a 25 year period, monthly repayments would be £1167.

Post Office mortgages regularly change their rates and conditions, and there may be new deals and offers online. Check the website or a comparison site like www.moneysupermarket.com for updates.

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